A newsagent recently approached newsXpress for help on discovering that the newsagency marketing group they had joined had first right of refusal to buy their business. This other group, no newsXpress, has it in their contract that they have the first right to buy out the business should the owner want to sell. This makes selling then business difficult as it has to be navigated should another party express interest in purchasing the business.
Our view is that such a position in the newsagency franchise agreement benefits the franchisor as ti is a barrier to the sale of the business and seems to lock the business into the franchise regardless of what purchaser / vendor may want. This could hurt the return a newsagent gets for the sale of their business.
Newsagencies are small businesses. The owners need the freedom to sell their businesses when they want and to parties they want. Other parties, like franchise groups, getting in the way of the sale process risk diluting the value achieved for the sale of a business.
This is another reason newsagents need to carefully look at the franchise agreements before they sign them.
