Does the Bevaris Alliance agreement allow the Individual to share in any security for the Franchisee's obligations before they are fully performed?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
22.5 The Individual shall not, until all of the Franchisee's obligations under this agreement have been finally performed and paid in full, exercise any right:
(a) of subrogation and indemnity; or
(b) to take the benefit of, share in or enforce any security or other guarantee or indemnity for any of the Franchisee's obligations; or
(c) to prove in the liquidation of the Franchisee, other than in accordance with the Franchisor's instructions.
22.6 If the Individual exercises any of the rights referred to in clause 22.5, he or she shall:
- (a) hold any amounts recovered on trust for the Franchisor; and
- (b) pay them to the Franchisor on demand.
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to the 2024 Bevaris Alliance Franchise Disclosure Document, the individual associated with the franchisee is restricted from benefiting from any security related to the franchisee's obligations until those obligations are completely fulfilled.
Specifically, the individual is prohibited from exercising rights such as subrogation and indemnity, or from taking part in or enforcing any security, guarantee, or indemnity related to the franchisee's responsibilities. This restriction remains in effect until all of the franchisee's financial and performance obligations under the franchise agreement have been fully met.
If the individual were to exercise any of these prohibited rights, they are obligated to hold any recovered amounts in trust for Bevaris Alliance and must remit those funds to Bevaris Alliance upon request. This provision ensures that Bevaris Alliance maintains priority in securing the franchisee's obligations and prevents the individual from undermining this security before Bevaris Alliance's interests are fully satisfied.