Right of first refusal (ROFR)

Definition

A right to step in and buy on the terms a seller already agreed.

Why It Matters

A franchisor or landlord holding one can take your deal at the price you spent months reaching, which is the whole risk in a single sentence. Ask for its status in writing before the LOI rather than during underwriting, because the holder usually has a fixed window to exercise it and that window has to run inside your exclusivity, not after it. Where one exists and cannot be waived, treat the diligence spend as at risk until the window closes.

In numbers: A landlord's ROFR on the building means that when you later try to buy it for $650,000, the landlord's chosen party can step in at that price first. A franchisor's ROFR on the business itself means your negotiated $1,200,000 sale can be taken over on identical terms, which some buyers learn only at their own exit.