What is the condition regarding the price when a Bevaris Alliance franchisee transfers their business to a third party?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
- (b) the price (in cash) that the proposed purchaser has offered to pay for the Franchisee's Business (Proposed Asset Sale Price).
16.7 Asset Purchase Notice. Within 20 Business Days of receipt (or deemed receipt) of an Asset Transfer Notice, the Franchisor shall be entitled (but not obliged) to give notice in writing to the Seller that it wishes to purchase the Franchisee's Business at the Proposed Asset Sale Price (Asset Purchase Notice), in which case the Franchisor is bound to buy and the Franchisee is bound to sell the Franchisee's Business at the Proposed Asset Sale Price, with such sale to complete within 20 Business Days of receipt (or deemed receipt) of the Asset Purchase Notice.
16.8 Transfer of Franchisee's Business third party. If, at the expiration of the initial period specified in clause 16.7, the Franchisor has not given an Asset Purchase Notice, the Franchisee may transfer the Franchisee's Business to the third party purchaser identified in the Asset Transfer Notice at a price not less than the Proposed Asset Sale Price provided that it does so within 60 days of the expiration of the initial 20 Business Day period specified in clause 16.7 and the criteria set out in clause 16.11 are satisfied.
16.9 Entire business transfer for cash only.
The Franchisee shall not be permitted to transfer part only of the Franchisee's Business.
Any transfer must be of the whole of the assets, rights and properties comprising the Franchisee's Business, transferred as a going concern, and shall be for cash consideration only.
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to the 2024 Bevaris Alliance Franchise Disclosure Document, if a franchisee wishes to transfer their business to a third-party purchaser, the sale price must be adhered to by certain conditions. The franchisee must first provide the franchisor with a Transfer Notice that includes the name of the proposed purchaser and the price (in cash) that the proposed purchaser has offered to pay for the Franchisee's Business, termed the "Proposed Asset Sale Price."
Bevaris Alliance then has the option to purchase the franchisee's business at the Proposed Asset Sale Price by providing an Asset Purchase Notice within 20 business days of receiving the Asset Transfer Notice. If Bevaris Alliance does not exercise this option, the franchisee can proceed with the transfer to the third party.
However, the transfer to the third party must occur within 60 days of the expiration of the initial 20-business-day period and must be at a price no less than the Proposed Asset Sale Price. This ensures that Bevaris Alliance has the first right of refusal and that the franchisee cannot sell the business for less than the initially proposed price to the third party after Bevaris Alliance declines to purchase it themselves. This also ensures that any transfer must be of the whole of the assets, rights and properties comprising the Franchisee's Business, transferred as a going concern, and shall be for cash consideration only.