What is the dependency between the Asset Transfer Notice and Bevaris Alliance's right to purchase the franchise?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
16.6 Asset Transfer Notice. If the Franchisee wishes to transfer the Franchisee's Business to a third party and has received an offer from a bona fide third-party purchaser for the Franchisee's Business, the Franchisee must first give an Asset 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 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.
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to the 2024 Bevaris Alliance Franchise Disclosure Document, Bevaris Alliance's right to purchase a franchise is dependent on the franchisee first providing an Asset Transfer Notice. If a franchisee receives an offer from a third party to purchase the franchise business, the franchisee must first provide Bevaris Alliance with an Asset Transfer Notice. This notice must include details of the proposed transfer, specifically the name of the proposed purchaser and the cash price offered for the business, referred to as the 'Proposed Asset Sale Price.'
Upon receiving the Asset Transfer Notice, Bevaris Alliance has a 20-business-day window to decide whether to exercise its right to purchase the franchise. Bevaris Alliance must provide written notice to the seller indicating its intent to purchase the franchise at the Proposed Asset Sale Price. This written notice from Bevaris Alliance is termed the 'Asset Purchase Notice.' If Bevaris Alliance issues an Asset Purchase Notice, it is then obligated to buy, and the franchisee is obligated to sell, the franchise business at the agreed-upon price. The sale must be completed within 20 business days of the franchisee's receipt of the Asset Purchase Notice.
If Bevaris Alliance does not provide an Asset Purchase Notice within the initial 20-business-day period, the franchisee is then permitted to transfer the business to the third-party purchaser identified in the Asset Transfer Notice. However, this transfer must occur within 60 days of the expiration of Bevaris Alliance's initial review period, and the sale price cannot be less than the Proposed Asset Sale Price. Additionally, the transfer must meet other criteria outlined in clause 16.11 of the franchise agreement, which are not detailed in the provided excerpts. This process ensures that Bevaris Alliance has the first right of refusal to purchase the franchise before it is sold to a third party, maintaining control over its franchise network.