What happens to the franchisee's obligations to Bevaris Alliance if the franchisor assigns the agreement?
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, if Bevaris Alliance assigns the franchise agreement, the franchisee and the individual guarantor must continue to fulfill their obligations to Bevaris Alliance until they receive written notice of the assignment. After receiving this notice, the franchisee's obligations shift to the assignee, who then has the right to enforce the agreement as if they were the original party. However, Bevaris Alliance remains liable for its own obligations under the agreement, even after the assignment.
This means that a Bevaris Alliance franchisee's responsibilities under the franchise agreement do not simply disappear if Bevaris Alliance transfers the agreement to another party. The franchisee must continue to perform their duties until they are formally notified that a new entity has taken over the franchisor's role. This protects the original franchisor during the transition period and ensures business continuity.
Furthermore, the liability of the franchisee and the individual guarantor to the new assignee cannot exceed their original liability to Bevaris Alliance. This provision protects the franchisee from potentially increased obligations due to the assignment. Bevaris Alliance also has the right to disclose information about the agreement and the franchisee to potential assignees, but only after notifying the franchisee and the individual guarantor of the proposed assignee's identity.
This clause ensures a smooth transition if Bevaris Alliance decides to assign the franchise agreement, while also protecting the rights and obligations of all parties involved. Prospective franchisees should understand these conditions to be aware of their responsibilities in the event of an assignment.