Can the Bevaris Alliance franchisor assign the agreement as security?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
he 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.
- 23.2 The Franchisor may, at any time, assign (absolutely or by way of security and in whole or in part), transfer, mortgage, charge or deal in any other manner with the benefit of any or all of any other party's obligations or any benefit arising under this agreement.
- 23.3 If there is an assignment pursuant to clause 23.2:
- (a) the Franchisee and Individual shall discharge their obligations under this agreement to the Franchisor until they receive written notice of the assignment;
- (b) the assignee may enforce this agreement as if it were a party to it, but the Franchisor shall remain liable for its obligations under this agreement;
- (c) the liability of the Franchisee and Individual to any assignee cannot be greater than their liability to the Franchisor;
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to the 2024 Bevaris Alliance Franchise Disclosure Document, the franchisor has the right to assign the franchise agreement. Specifically, Bevaris Alliance can assign the agreement absolutely or as a form of security, either entirely or partially. This means Bevaris Alliance can use the franchise agreement as collateral for financial arrangements.
For a prospective franchisee, this clause implies that the agreement they have with Bevaris Alliance could be transferred to another party, such as a lender, if Bevaris Alliance seeks financing. The franchisee is obligated to continue fulfilling their obligations to Bevaris Alliance until they receive written notification of the assignment.
Following the assignment, the new party can enforce the agreement as if they were Bevaris Alliance, but Bevaris Alliance remains responsible for its obligations under the agreement. The franchisee's liability to the assignee is capped at their original liability to Bevaris Alliance. Bevaris Alliance is also permitted to share information about the agreement with potential assignees, provided the franchisee receives notice of the assignee's identity.