If Bevaris Alliance purchases a Bevaris Alliance business, does Bevaris Alliance assume the seller's liabilities?
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. |
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, if Bevaris Alliance exercises its option to purchase a franchisee's business, it will not assume the seller's liabilities. The FDD specifies that the purchase will be for fair market value, excluding any value for goodwill, and will require legal compliance.
This provision is important for prospective franchisees to understand, as it clarifies the terms under which Bevaris Alliance might acquire an existing franchise. The exclusion of goodwill from the purchase price could impact the overall valuation of the business during acquisition. Additionally, the explicit statement that Bevaris Alliance does not assume the seller's liabilities protects the company from inheriting any outstanding debts or legal issues associated with the franchise's previous operation.
Franchisees should seek legal counsel to fully understand the implications of this clause, particularly regarding valuation and liability transfer, before entering into a franchise agreement with Bevaris Alliance. Understanding these conditions is crucial for making informed decisions about the long-term financial aspects of owning and potentially selling a Bevaris Alliance franchise.