Can Bevaris Alliance assign its rights and obligations under the franchise agreement?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
gations under this agreement;
- (b) devote his full-time attention and effort to the Franchisee's Business;
- (c) be a director, officer, or managing member of the Franchisee; and
- (d) hold, in his or her own name, more than 50% of the issued voting capital of the Franchisee.
- 22.8 The Individual may not assign or transfer any of his rights or obligations under this agreement.
23. Assignment
- 23.1 This agreement is personal to the Franchisee and the Individual, who, subject to clause 16 and clause 17 may not, without the prior written consent of the Franchisor (such consent not to be unreasonably conditioned, withheld or delayed), assign, transfer, mortgage, charge, declare a trust of, sub-contract, delegate or deal in any other manner with:
- (a) this agreement or any of their rights and obligations under it (or any document referred to in it); or
- (b) the Franchisee's Business, or purport to do any of the same.
- 23.2 The Franchisor may, at any time, assign (absolutely or by way of security and in whole or in part), transfer, mortgage, charge or deal in any other manner with the benefit of any or all of any other party's obligations or any benefit arising under this agreement.
- 23.3 If there is an assignment pursuant to clause 23.2:
- (a) the Franchisee and Individual shall discharge their obligations under this agreement to the Franchisor until they receive written notice of the assignment;
- (b) the assignee may enforce this agreement as if it were a party to it, but the Franchisor shall remain liable for its obligations under this agreement;
- (c) the liability of the Franchisee and Individual to any assignee cannot be greater than their liability to the Franchisor;
- (d) notwithstanding clause 27.3, the Franchisor may disclose to a proposed assignee any information in its possession that relates to this agreement or its subject matter, the negotiations relating to it and the other party which is reasonably necessary to disclose for the purposes of the proposed assignment;
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to Bevaris Alliance's 2024 Franchise Disclosure Document, the franchise agreement is personal to the franchisee and the individual involved. The franchisee is restricted from assigning, transferring, mortgaging, charging, declaring a trust of, subcontracting, delegating, or dealing in any manner with the agreement, their rights, obligations, or the franchise business without obtaining prior written consent from Bevaris Alliance. This consent will not be unreasonably conditioned, withheld, or delayed.
However, Bevaris Alliance retains the right to assign, transfer, mortgage, charge, or deal with the benefits of any other party's obligations or any benefit arising under the agreement at any time. This assignment can be absolute, by way of security, in whole, or in part.
If Bevaris Alliance assigns the agreement, the franchisee and the individual must continue to fulfill their obligations to Bevaris Alliance until they receive written notice of the assignment. After receiving notice, the assignee can enforce the agreement as if they were a party to it, but Bevaris Alliance remains liable for its obligations under the agreement. The liability of the franchisee and the individual to any assignee cannot exceed their liability to Bevaris Alliance. Bevaris Alliance may disclose information about the agreement to a proposed assignee after notifying the franchisee and the individual of the assignee's identity.
This clause ensures that while franchisees need permission to transfer their interests, Bevaris Alliance has the flexibility to manage its rights and obligations, which is a fairly standard practice in franchising agreements. Franchisees should be aware of these conditions as they consider the long-term implications of the agreement.