What is the definition of 'Sale Shares' in the context of transferring shares of Bevaris Alliance?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
(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 deemed receipt) of the Purchase Notice.
16.4 Transfer where no Purchase Notice given.
If, at the expiration of the initial period specified in clause 16.3, the Franchisor has not given a Purchase Notice, the Franchisee may transfer the Sale Shares to the proposed purchaser identified in the Transfer Notice at a price not less than the Proposed Sale Price provided that it does so within 60 days of the expiration of the initial 20 Business Day period specified in clause 16.3 and the criteria set out in clause 16.11 are satisfied.
- 16.5 Entire share transfer for cash only. The Individual shall not be permitted to transfer some only of its shares.
Any transfer must be of the entire issued share capital of the Franchisee in accordance with this clause 16 and shall be for cash consideration only.
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to Bevaris Alliance's 2024 Franchise Disclosure Document, 'Sale Shares' refers to the entire issued share capital of the franchisee. If a franchisee wishes to transfer their shares, they must transfer all of them, not just a portion. This transfer must be for cash consideration only.
Before transferring the shares to a third party, the franchisee must provide a Transfer Notice to Bevaris Alliance, including the name of the proposed purchaser and the price offered for the shares, referred to as 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 its right to purchase the shares within a specified period, the franchisee may proceed with the transfer to the proposed purchaser, provided that the transfer occurs within 60 days of the initial period's expiration and meets certain criteria outlined in the franchise agreement. This ensures that Bevaris Alliance retains some control over who becomes a shareholder in a franchise location and maintains the integrity of the franchise system.