I'm an unagented novelist. My first novel was published by a small press earlier this year. My second is nearly complete.
According to our contract, my publisher has first right of refusal for all my subsequent works. However, I want out--because they haven't promoted my book at all. I've sent out hundreds of postcards to bookstores, done all the press releases, organized readings, and mailed review copies all over the country and the world. When I asked my publisher to help a little--pointing out that our contract stipulates that they are responsible for promotion too--the head of the company responded that the contract actually says they're responsible for promotion 'as the budget allows' and they've no funds for promotion this year.
(And not incidentally I've got some good reviews and press from my efforts!)
I'd like to try and sell my second book to a larger publisher; so I'd like to get an agent. My question for you is: how much of a problem will this first right of refusal clause be for an agent? I fear that a potential agent might be put off by that sort of baggage. Should I approach my publisher now, and ask to be released from that clause before I query agents? Or is it something that a new agent would be willing to negotiate for me?
So the short answer is yes, you need an agent.
The long answer is yes, you can get out of your first right of refusal clause (aka the "second book" clause), though how the clause works is complicated and will vary from company to company. I don't know what it says in your clause, but this is how it generally works in a standard publication contract:
"First right of refusal" means the publisher gets first crack at whatever you write next for publication. Meaning, you can't shop it at other houses before they look at it. The publisher can then decide to (a) turn it down, refusing to make an offer, and essentially letting you go whether you want to be let go or not, or (b) make you an offer for the second book. Let's say for the sake of argument it's a $5000 advance.
As long as you haven't said "yes" to the offer, the offer is on the table until they decide to withdraw it. If you're not happy with your 5K or just upset with the company in general, you can say to them, "I'm not happy with your offer and want to shop it at other places."
They then have three options:
(1) To raise the offer to something you agree to in order to keep you at the publisher.
(2) To keep the offer the same, but allow you to shop the book elsewhere with the offer still on the table.
(3) To say, "Screw you, we withdraw our offer, have fun trying to get this published elsewhere."
In other words, if you tell them (and you have to tell them) that you want to take it to other places, you risk losing the original publisher altogether and having no publisher for the second book. In your case this doesn't seem like a major problem, but it can be. For example, after the success of my first book, the publisher made an offer that was downright insulting for books 2 and 3. Since in my case the publisher had done a good job with book 1, my agent and I decided not to risk threatening to walk by shopping at other places and stick with the original publisher, even with the very, very low advance for a sequel to a successful book.
So let's say option (2) happens. Then thing can get downright complicated. You shop the book to the other publishing companies, and they make offers. If they make an offer that's equal to or better than the original publisher's offer, you can accept it and walk from the original publisher (5. If they make a LOWER offer (under 5K), the second book clause is still in effect and you cannot walk from the original publisher for a lower offer. In other words, you can't jump ship just because you don't like people; you generally have to do it because there's a monetary justification. Of course the editor at the publishing house could just agree to let you walk for the smaller offer; a lot of this business is done very informally.
This is why you need an agent. The agent can negotiate this for you and gauge what you should probably do.