Can the liability of a Bevaris Alliance franchisee to an assignee be greater than their liability to the franchisor?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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 Bevaris Alliance's 2024 Franchise Disclosure Document, the liability of a franchisee to an assignee cannot exceed their liability to the franchisor. This provision is part of the assignment terms outlined in the franchise agreement.
This means that if Bevaris Alliance assigns the franchise agreement to another party, the franchisee's financial and legal obligations to that new party (the assignee) are capped at the level of their original obligations to Bevaris Alliance. This protects the franchisee from potentially increased liability due to the assignment.
For a prospective Bevaris Alliance franchisee, this clause offers a degree of security. It ensures that an assignment of the franchise agreement by Bevaris Alliance will not result in the franchisee facing greater financial or legal risks than they initially agreed to. This is a fairly standard protection in franchising, preventing franchisors from using assignment as a way to increase franchisee burdens.