Does a franchisor's right of first refusal mean they can buy my business instead of my buyer?

If your franchise agreement contains a right of first refusal, then yes, that's generally exactly what it's designed to do — it gives the franchisor the opportunity to step into your buyer's proposed deal and acquire the franchise itself, usually on the same terms your outside buyer offered, before you're permitted to sell to that outside buyer. This is a common clause in franchise agreements specifically because franchisors want control over who operates under their brand at every location.

How this actually plays out depends heavily on the clause's exact wording — how much time the franchisor has to exercise the right, whether it applies to the whole deal or just certain assets, and what happens to your relationship with the outside buyer if the franchisor does step in and your original deal falls through as a result. Poorly drafted or ambiguous rights of first refusal can create real friction between you, your buyer, and the franchisor if the timing or scope isn't clear.

Because this clause can completely change who ends up buying your business, review it carefully before you accept an offer or set a closing timeline. A Treadstone business lawyer can confirm exactly what your agreement requires.