What constitutes a prohibited assignment of rights or licenses under the Bevaris Alliance franchise agreement?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
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; and
- (e) any disclosure pursuant to clause 23.3(d) shall only be made after notice of the identity of the proposed assignee has been given to the Franchisee and Individual.
- 23.4 Each party to this agreement is acting on its own behalf and not for the benefit of another person.
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to the 2024 Bevaris Alliance Franchise Disclosure Document, the franchise agreement is personal to both the franchisee and the individual involved. As such, the franchisee is restricted from assigning, transferring, mortgaging, charging, declaring a trust of, subcontracting, delegating, or dealing in any other manner with the agreement, their rights and obligations, or the franchisee's business without obtaining prior written consent from Bevaris Alliance. This consent will not be unreasonably conditioned, withheld, or delayed, providing some assurance to the franchisee.
This restriction on assignment is a standard practice in franchising, designed to ensure that Bevaris Alliance maintains control over who operates its franchises and upholds its brand standards. The clause aims to prevent franchisees from unilaterally transferring their rights and obligations to third parties who may not meet the franchisor's criteria or adhere to the established business model.
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. If such an assignment occurs, the franchisee and the individual involved are obligated to continue fulfilling their obligations to Bevaris Alliance until they receive written notice of the assignment. The assignee can then 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 individual to any assignee cannot exceed their liability to Bevaris Alliance. Bevaris Alliance may disclose necessary information about the agreement to a proposed assignee after notifying the franchisee and the individual involved.