For a Bevaris Alliance franchise transfer, is the Individual jointly and severally liable for the warranty?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
- 16.13 Warranty. Any transfer of shares or assets to the Franchisor under this clause 16 shall be deemed to include a warranty from the Individual and the Franchisee on a joint and several basis that the shares or assets (as appropriate) are sold with full title guarantee and are free from encumbrances.
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to the 2024 Bevaris Alliance Franchise Disclosure Document, in the event of a share or asset transfer to the Franchisor, the Individual involved is jointly and severally liable for the warranty. This means that both the Franchisee and the Individual provide a guarantee that the shares or assets are transferred with full ownership rights and are free from any encumbrances.
For a prospective Bevaris Alliance franchisee, this has significant implications. If the franchisee plans to transfer shares or assets back to Bevaris Alliance, the Individual (likely a principal or owner) will be held jointly responsible with the Franchisee for ensuring the transferred assets are free of any liens, claims, or other legal issues. This responsibility is not limited to just one party; both are fully accountable.
This clause protects Bevaris Alliance by ensuring they receive clear title to any reacquired shares or assets. It also places a significant responsibility on the franchisee and the individual to conduct thorough due diligence before any transfer to ensure there are no hidden liabilities or encumbrances associated with the assets or shares being transferred. Franchisees should seek legal counsel to fully understand the implications of this joint and several warranty before entering into a franchise agreement or contemplating a transfer.