Can a Bevaris Alliance franchisee transfer only part of their business?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
gations under this agreement;
- (b) devote his full-time attention and effort to the Franchisee's Business;
- (c) be a director, officer, or managing member of the Franchisee; and
- (d) hold, in his or her own name, more than 50% of the issued voting capital of the Franchisee.
- 22.8 The Individual may not assign or transfer any of his rights or obligations under this agreement.
23. Assignment
- 23.1 This agreement is personal to the Franchisee and the Individual, who, subject to clause 16 and clause 17 may not, without the prior written consent of the Franchisor (such consent not to be unreasonably conditioned, withheld or delayed), assign, transfer, mortgage, charge, declare a trust of, sub-contract, delegate or deal in any other manner with:
- (a) this agreement or any of their rights and obligations under it (or any document referred to in it); or
- (b) the Franchisee's Business, or purport to do any of the same.
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to the 2024 Bevaris Alliance Franchise Disclosure Document, franchisees face restrictions on transferring their business. Specifically, clause 23.1 states that franchisees cannot assign, transfer, mortgage, charge, declare a trust of, sub-contract, delegate, or deal in any manner with the franchise agreement or their rights and obligations under it without the prior written consent of Bevaris Alliance. This consent must not be unreasonably conditioned, withheld, or delayed.
Furthermore, clause 16.1 reinforces these restrictions by stating that no transfer of any shares in the Franchisee by the Individual or of the Franchisee's Business or any material part of the assets, rights or properties comprising the Franchisee's Business, other than sales to Customers in the normal course by the Franchisee or the creation of any encumbrance over the shares in the Franchisee by the Individual or over any part of the Franchisor's Business by the Franchisor or Individual may take place otherwise than in accordance with this clause 16 and clause 17.
In practical terms, a Bevaris Alliance franchisee is significantly limited in their ability to transfer only a portion of their business or its assets without first obtaining explicit approval from Bevaris Alliance. This provision protects Bevaris Alliance's interests by ensuring they maintain control over who operates under their brand and how the business is conducted. Franchisees need to be aware that any attempt to transfer part of their business without consent could be a breach of the franchise agreement, potentially leading to penalties or termination.