What is the definition of 'Proposed Sale Price' in the context of transferring shares of Bevaris Alliance?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
dual wishes to transfer its shares in the Franchisee (Sale Shares) to a third party and has received an offer from a bona fide third-party purchaser for the Sale Shares, the Individual must first give a Transfer Notice to the Franchisor (giving details of the proposed transfer including):
- (a) the name of the proposed purchaser; and
- (b) the price (in cash) that the proposed purchaser has offered to pay for the Sale Shares (Proposed Sale Price).
- 16.3 Purchase notice. Within 20 Business Days of receipt (or deemed receipt) of a Transfer Notice, the Franchisor shall be entitled (but not obliged) to give notice in writing to the Individual that it wishes to purchase the Sale Shares at the Proposed Sale Price (Purchase Notice), in which case the Franchisor is bound to buy and the Individual is bound to sell all of the Sale Shares at the Proposed Sale Price, with such sale to complete within 20 Business Days of receipt (or dee
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to the 2024 Bevaris Alliance Franchise Disclosure Document, the 'Proposed Sale Price' is defined as the price, in cash, that a proposed purchaser has offered to pay for the shares being sold. This definition is relevant when a franchisee intends to transfer their shares to a third party.
When a franchisee wishes to transfer their shares, they must provide a Transfer Notice to Bevaris Alliance, which includes the name of the proposed purchaser and the Proposed Sale Price. Bevaris Alliance then has the option to purchase the shares themselves at the Proposed Sale Price. If Bevaris Alliance does not exercise this option within a specified period, the franchisee may proceed with the transfer to the proposed purchaser, provided the sale price is not less than the initially Proposed Sale Price.
However, the FDD also states that in the case of a transfer to Bevaris Alliance itself (as opposed to a third-party purchaser), the Proposed Sale Price will be the fair market value as determined by a certified public accounting firm selected by Bevaris Alliance. This distinction is important because it means that the price may not be determined by a third-party offer but rather by an independent valuation when Bevaris Alliance is the buyer.