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Date Posted: 03:51:55 02/21/03 Fri
Author: agree2
Subject: agree2

Option for franchisor to purchase franchised business
(1) Option
If at any time CD wishes to sell, transfer, assign or otherwise part with the Business or any part of it or the premises used for the Business or any interest in them, he must immediately give notice of that desire to AB and offer, by notice in writing to AB (‘an offer’), to sell to him.
(2) Acceptance and completion
If AB accepts the offer within 28 days, CD must sell and AB must purchase the assets included in the offer for consideration and on conditions ascertained as set out below. The sale and purchase must be completed within 2 months of the date of acceptance or the date on which the price is ascertained, if later.
(3) Conditions of sale
The price and the conditions of sale and purchase are to be as agreed between the parties. The price must represent the net market value of the assets to be sold without taking into account goodwill or any additional value arising from sale of the Business as a going concern. The conditions must be such as in the circumstances would be normal and reasonable. If the parties fail to agree on the price and conditions, they must be settled by a chartered accountant chosen by the parties or, if they fail to agree on the choice of a chartered accountant within 14 days, by the President for the time being of the Institute of Chartered Accountants in England and Wales. The chartered accountant will act as an expert and not as an arbitrator. His decision is to be conclusive and binding on the parties. The costs of the chartered accountant are to be shared equally by the parties.
(4) Termination of rights
On sale or transfer by CD of any part of the Business or the premises used for it, the rights of AB, in so far as they relate to the assets disposed of, will terminate but without prejudice to CD’s existing obligations.
(5) Refusal and sale to third party
(5.1) If AB does not indicate his acceptance of an offer within 28 days of the receipt of the offer notice, CD may within 3 months of the notice sell, transfer, assign, lease, sub-let or otherwise part with the Business or any part of it or the premises or any part of his interest in them as set out in the notice to AB.
(5.2) No third party who acquires the Business or any part of it or the premises or any interest in them may have disclosed to him the contents of AB’ standard operating manual or any part of it. He may not operate under the Outlet Name or the Trade Name, or in accordance with AB’s franchise operating manual or any part of it unless he has been approved by AB and has agreed to be bound by the terms and conditions of the standard franchise agreement used by AB at the time for a period not less than the residue of the Term in accordance with the provisions of this agreement, including any option to extend the Term. CD must pay to AB the reasonable costs and expenses incurred by AB in assessment of any person for approval under this clause.

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