How long does the estate of a deceased Bevaris Alliance franchisee have to assign the franchise to an approved transferee?
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. |
| p. Death or disability of | Section 17 | Franchise may be assigned by estate to approve transferee |
| franchisee | in three months. |
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, in the event of the death or disability of a franchisee, their estate has a limited time to assign the franchise to a transferee that Bevaris Alliance approves. Specifically, the estate has three months to complete this assignment.
This timeframe is crucial for the estate as it navigates the legal and administrative processes following the franchisee's death. Finding a suitable and approved transferee within three months may present challenges, especially considering the various conditions Bevaris Alliance sets for transfer approval, such as the transferee's financial stability, operational experience, and acceptance of the current franchise agreement terms. The estate must act swiftly to identify, vet, and secure a qualified transferee to preserve the franchise's value.
If the estate fails to assign the franchise within the three-month window, Bevaris Alliance may have the option to purchase the business. This highlights the importance of proactive planning and communication between the franchisee, their estate, and Bevaris Alliance to ensure a smooth transition and avoid potential loss of value. Prospective franchisees should consider these implications and discuss succession planning with legal and financial advisors.