Is it a condition of transfer approval by Bevaris Alliance that the franchisee's account is current?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| which must be approved by us. | ||
| l. Bevaris approval of transfer | Section | We have the right to approve all transfers, which shall be |
| by franchisee | 16.11 | subject to the provisions of the Franchise Agreement. |
| m. Conditions for Bevaris approval of transfer | Section 16.11 | Transferee approved by us, transfer fee paid, transferee not competitor, your account is current, you sign a release, transferee signs all documents, lender consents, and subordination agreements. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 17–18)
What This Means (2024 FDD)
According to Bevaris Alliance's 2024 Franchise Disclosure Document, one of the conditions for Bevaris Alliance's approval of a franchise transfer is that the franchisee's account is current. This means that before a franchisee can transfer their franchise to a new owner, they must ensure that all financial obligations to Bevaris Alliance are up to date.
This requirement is fairly standard in franchising. Franchisors want to ensure that franchisees are in good standing before allowing them to transfer the business. This protects the brand and ensures a smooth transition for the new franchisee.
In addition to the account being current, Bevaris Alliance also requires that the transferee is approved by them, the transfer fee is paid, the transferee is not a competitor, the current franchisee signs a release, the transferee signs all required documents, and the lender consents to the transfer along with any necessary subordination agreements. These conditions collectively ensure that the transfer process is thorough and protects the interests of Bevaris Alliance.