In the event of death or disability, can the Bevaris Alliance franchise be assigned by the estate?
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. |
| n. Bevaris’ right of first refusal to acquire franchisee’s business | Section 16.3 | Bevaris can match any offer for the purchase of Your franchise at Bevaris’ option. |
| o. Bevaris’ option to purchase Your business | Section 16.7 | Upon transfer, fair market value (but no value for goodwill), legal compliance, no assumption of your liabilities. |
| p. Death or disability of | Section 17 | Franchise may be assigned by estate to approve transferee |
| franchisee | in three months. |
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, in the event of the franchisee's death or disability, the franchise may be assigned by the estate to an approved transferee within three months. This provision, outlined in Section 17 of the Franchise Agreement, allows for the continuation of the Bevaris Alliance franchise even if the original franchisee is no longer able to manage the business.
For a prospective Bevaris Alliance franchisee, this is a significant consideration. It means that the investment in the franchise is not necessarily lost in the event of unforeseen circumstances such as death or disability. The franchisee's estate has the option to transfer the franchise to a qualified individual, providing a potential avenue for recouping the investment and ensuring the business's continuity.
However, it is important to note that the transferee must be approved by Bevaris Alliance. This implies that the proposed transferee will need to meet the franchisor's standards and qualifications for franchisees. Additionally, the estate only has three months to find and secure an approved transferee, which may require swift action and careful planning.
This type of provision is relatively common in franchise agreements, as it protects both the franchisee's investment and the franchisor's brand. By allowing for transfer under specific conditions, Bevaris Alliance maintains control over who operates the franchise while providing a degree of flexibility and security for the franchisee and their family.