What is the impact of clause 17 on the transfer of shares or assets for Bevaris Alliance?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
nt of the Transfer Fee shall be due and payable upon Franchisee's providing of notice of the proposed transfer to Franchisor pursuant to clauses 16.2 or 16.6 of this agreement, and the remaining fifty percent of the Transfer Fee shall be due and payable upon Franchisor's execution of the new agreement with the transferee.
17. Death or incapacity of individual
- 17.1 Right of Franchisor to buy shares on death of Individual. If the Individual dies during the Term, his personal representatives shall, within 24 hours inform the Franchisor of his death, and within 30 days offer to sell the Individual's shares to the Franchisor by way of serving a Transfer Notice under clause 16.2. In such circumstances, the terms of clause 16.2, clause 16.3, clause 16.4 and clause 16.2 shall apply save that:
- (a) References to the Individual in those clauses shall be deemed to be references to the Individual's personal representatives.
- (b) References to the third-party purchaser or proposed purchaser in those clauses shall be deemed to be references to the Franchisor or beneficiaries of the shares either in the Individual's will or under the rules on intestacy. If such beneficiaries do not want to become the registered holder of such shares, the references shall be taken as being to any other third party specified in the notice by the personal representatives.
- (c) the words "and has received an offer from a bona fide third-party purchaser for the Sale Shares" shall be deemed deleted in respect of a proposed transfer to a Franchisor.
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to the 2024 Bevaris Alliance Franchise Disclosure Document, clause 17 addresses the death or incapacity of the individual franchisee. Specifically, if the individual franchisee dies during the term of the agreement, their personal representatives must inform Bevaris Alliance within 24 hours and offer to sell the franchisee's shares to Bevaris Alliance within 30 days by serving a Transfer Notice under clause 16.2.
The terms of clauses 16.2, 16.3, 16.4, and 16.2 apply in this situation, with some modifications. References to the individual franchisee are considered references to the individual's personal representatives. References to a third-party purchaser are considered references to Bevaris Alliance or the beneficiaries of the shares, either through the individual's will or intestacy rules. If the beneficiaries do not want to become registered holders of the shares, the references are to any other third party specified in the notice by the personal representatives.
Additionally, if the individual franchisee is unable to operate the Bevaris Alliance business to the required standard for more than 60 days in any 90-day period, Bevaris Alliance has the right to appoint a manager to operate the business at the franchisee's expense. This manager has full powers to ensure the franchisee complies with the terms of the agreement. This provision ensures the continued operation of the franchise and adherence to Bevaris Alliance's standards even in the event of the franchisee's death or incapacity.