What is the minimum acceptable price for the transfer of Sale Shares by the Individual of Bevaris Alliance?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
dual wishes to transfer its shares in the Franchisee (Sale Shares) to a third party and has received an offer from a bona fide third-party purchaser for the Sale Shares, the Individual must first give a Transfer Notice to the Franchisor (giving details of the proposed transfer including):
- (a) the name of the proposed purchaser; and
- (b) the price (in cash) that the proposed purchaser has offered to pay for the Sale Shares (Proposed Sale Price).
- 16.3 Purchase notice. Within 20 Business Days of receipt (or deemed receipt) of a Transfer Notice, the Franchisor shall be entitled (but not obliged) to give notice in writing to the Individual that it wishes to purchase the Sale Shares at the Proposed Sale Price (Purchase Notice), in which case the Franchisor is bound to buy and the Individual is bound to sell all of the Sale Shares at the Proposed Sale Price, with such sale to complete within 20 Business Days of receipt (or deemed receipt) of the Purchase Notice.
- 16.4 Transfer where no Purchase Notice given. If, at the expiration of the initial period specified in clause 16.3, the Franchisor has not given a Purchase Notice, the Franchisee may transfer the Sale Shares to the proposed purchaser identified in the Transfer Notice at a price not less than the Proposed Sale Price provided that it does so within 60 days of the expiration of the initial 20 Business Day period specified in clause 16.3 and the criteria set out in clause 16.11 are satisfied.
- 16.5 Entire share transfer for cash only. The Individual shall not be permitted to transfer some only of its shares. Any transfer must be of the entire issued share capital of the Franchisee in accordance with this clause 16 and shall be for cash consideration only.
- 16.6 Asset Transfer Notice. If the Franchisee wishes to transfer the Franchisee's Business to a third party and has received an offer from a bona fide third-party purchaser for the Franchisee's Business, the Franchisee must first give an Asset Transfer Notice to the Franchisor giving details of the proposed transfer including:
- (a) the name of the proposed purchaser; and
- (b) the price (in cash) that the proposed purchaser has offered to pay for the Franchisee's Business (Proposed Asset Sale Price).
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to the 2024 FDD, if an individual franchisee of Bevaris Alliance wishes to transfer their shares, the minimum acceptable price depends on who the buyer is. If the buyer is a third party, the transfer price must be no less than the 'Proposed Sale Price,' which is the price offered by the third-party purchaser.
However, if the buyer is Bevaris Alliance itself (the Franchisor), the 'Proposed Sale Price' is not applicable. Instead, the price will be the fair market value of the shares, as determined by a certified public accounting firm selected by Bevaris Alliance. This valuation method ensures an objective assessment of the shares' worth in the event of a transfer to the franchisor.
The FDD stipulates that any transfer must be for the entire issued share capital of the franchisee and must be in cash. This prevents partial transfers and ensures a clean transaction. The franchisee must also provide Bevaris Alliance with any information about the shares or the business that the franchisor requests to help them decide whether to exercise their rights to purchase the shares.