What options does the Franchisor have upon receiving a Transfer Notice for a Bevaris Alliance franchise?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
16.2 Share transfer notice. If the Individual 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.
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to Bevaris Alliance's 2024 Franchise Disclosure Document, when an individual franchisee wishes to transfer their shares in the franchise to a third party and has received a legitimate offer, they must first provide a Transfer Notice to Bevaris Alliance. This notice must include the name of the proposed purchaser and the cash price offered for the shares, referred to as the Proposed Sale Price.
Upon receiving the Transfer Notice, Bevaris Alliance has a specified timeframe to respond. Within 20 business days of receiving the notice, Bevaris Alliance is entitled, but not obligated, to provide written notice to the individual franchisee stating its desire to purchase the shares at the Proposed Sale Price. This is termed a Purchase Notice. If Bevaris Alliance issues a Purchase Notice, it is then bound to buy, and the individual is bound to sell, all of the shares at the Proposed Sale Price. The sale must be completed within 20 business days of the receipt of the Purchase Notice.
If Bevaris Alliance does not provide a Purchase Notice within the initial 20 business day period, the franchisee can proceed with transferring the shares to the proposed purchaser identified in the Transfer Notice. However, this transfer must occur within 60 days of the expiration of the initial 20 business day period, and the sale price cannot be less than the Proposed Sale Price. Additionally, the criteria outlined in clause 16.11 of the franchise agreement must be met for the transfer to be valid. These stipulations ensure that Bevaris Alliance retains some control over who becomes a franchisee and that the financial terms of the transfer are reasonable.