Right of first offer

Definition

A holder's right to bid first before the owner can shop the business.

Why It Matters

It is the softer sibling of a right of first refusal, and the difference decides how much it can cost you. A first offer only obliges the seller to come to the holder before going to market, and if they cannot agree the seller is free. A first refusal lets the holder match whatever you negotiate, which turns your bid, your diligence and your legal spend into the stalking horse for somebody else. Read which one a landlord, a franchisor or a minority holder actually has before you spend anything, because one of them can take the deal at the end of it.