Which clauses apply to the sale of shares to Bevaris Alliance after the death of an individual franchisee?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
nt of the Transfer Fee shall be due and payable upon Franchisee's providing of notice of the proposed transfer to Franchisor pursuant to clauses 16.2 or 16.6 of this agreement, and the remaining fifty percent of the Transfer Fee shall be due and payable upon Franchisor's execution of the new agreement with the transferee.
17. Death or incapacity of individual
- 17.1 Right of Franchisor to buy shares on death of Individual. If the Individual dies during the Term, his personal representatives shall, within 24 hours inform the Franchisor of his death, and within 30 days offer to sell the Individual's shares to the Franchisor by way of serving a Transfer Notice under clause 16.2. In such circumstances, the terms of clause 16.2, clause 16.3, clause 16.4 and clause 16.2 shall apply save that:
- (a) References to the Individual in those clauses shall be deemed to be references to the Individual's personal representatives.
- (b) References to the third-party purchaser or proposed purchaser in those clauses shall be deemed to be references to the Franchisor or beneficiaries of the shares either in the Individual's will or under the rules on intestacy. If such beneficiaries do not want to become the registered holder of such shares, the references shall be taken as being to any other third party specified in the notice by the personal representatives.
- (c) the words "and has received an offer from a bona fide third-party purchaser for the Sale Shares" shall be deemed deleted in respect of a proposed transfer to a Franchisor.
- (d) in the case of a transfer to a Franchisor (as opposed to a third-party purchaser) the Proposed Sale Price shall be the fair market value as determined by a certified public accounting firm selected by Franchisor.
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to the 2024 Bevaris Alliance Franchise Disclosure Document, clause 17.1 outlines the procedure if the individual franchisee dies during the term of the agreement. The personal representatives of the deceased must inform Bevaris Alliance of the death within 24 hours and offer to sell the individual's shares to Bevaris Alliance within 30 days by serving a Transfer Notice under clause 16.2.
Specifically, clause 16.2, clause 16.3, clause 16.4 and clause 16.2 apply in these circumstances, with some modifications. References to the individual franchisee in those clauses are considered references to the individual's personal representatives. Also, references to a third-party purchaser are considered references to Bevaris Alliance or the beneficiaries of the shares, either in the individual's will or under the rules of intestacy. If the beneficiaries do not want to become registered holders of the shares, the references are to any other third party specified in the notice by the personal representatives.
Additionally, in the event that the Franchisor or beneficiaries do not wish to become the registered holders of the shares and there is no third party, the Transfer Notice shall be served without reference to a third party purchaser, and clause 16.3 shall apply. Furthermore, the words "and has received an offer from a bona fide third-party purchaser for the Sale Shares" are deemed deleted in respect of a proposed transfer to Bevaris Alliance. In the case of a transfer to Bevaris Alliance, the Proposed Sale Price shall be the fair market value as determined by a certified public accounting firm selected by Bevaris Alliance.