Does Bevaris Alliance have an option to purchase a franchisee's business?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| 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, Bevaris Alliance has the option to purchase a franchisee's business under certain conditions. Specifically, Bevaris Alliance has the right to match any offer a franchisee receives for their business. Additionally, Bevaris Alliance has the option to purchase the business upon transfer of the franchise.
If Bevaris Alliance exercises its option to purchase the franchise upon transfer, the purchase price will be based on the fair market value of the business. However, the valuation will not include any value for goodwill. Furthermore, Bevaris Alliance will not assume any of the franchisee's liabilities as part of the purchase. The franchisee must also ensure legal compliance before Bevaris Alliance proceeds with the purchase.
These provisions regarding Bevaris Alliance's right of first refusal and option to purchase the business are fairly common in franchise agreements. They allow Bevaris Alliance to maintain control over the brand and ensure a smooth transition if a franchisee exits the system. Prospective franchisees should carefully consider these terms and seek professional advice to understand the implications for their investment and exit strategy.