What is the procedure for an Individual to transfer shares in the Franchisee of Bevaris Alliance to a third party?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee's Business, other than sales to Customers in the normal course by the Franchisee or the creation of any encumbrance over the shares in the Franchisee by the Individual or over any part of the Franchisor's Business by the Franchisor or Individual may take place otherwise than in accordance with this clause 16 and clause 17.
- 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.
- 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).
- 16.7 Asset Purchase Notice. Within 20 Business Days of receipt (or deemed receipt) of an Asset Transfer Notice, the Franchisor shall be entitled (but not obliged) to give notice in writing to the Seller that it wishes to purchase the Franchisee's Business at the Proposed Asset Sale Price (Asset Purchase Notice), in which case the Franchisor is bound to buy and the Franchisee is bound to sell the Franchisee's Business at the Proposed Asset Sale Price, with such sale to complete within 20 Business Days of receipt (or deemed receipt) of the Asset Purchase Notice.
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to the 2024 Bevaris Alliance Franchise Disclosure Document, an individual wishing to transfer shares in the Franchisee to a third party must first provide a Transfer Notice to Bevaris Alliance. This notice must include the name of the proposed purchaser and the price (in cash) that the proposed purchaser has offered to pay for the shares, referred to as the Proposed Sale Price.
Upon receiving the Transfer Notice, Bevaris Alliance has 20 business days to decide if it wants to purchase the shares at the Proposed Sale Price by issuing a Purchase Notice. If Bevaris Alliance decides to purchase the shares, the sale must be completed within 20 business days of the Purchase Notice receipt. The transfer must be for the entire share capital of the Franchisee and for cash consideration only.
If Bevaris Alliance does not issue a Purchase Notice within the initial 20 business day period, the Franchisee can proceed with the share transfer to the proposed purchaser identified in the Transfer Notice. However, the sale must occur within 60 days of the initial 20 business day period's expiration, and the price cannot be less than the Proposed Sale Price. Additionally, certain criteria outlined in clause 16.11 must be met, including that all monies due to Bevaris Alliance have been paid, the proposed purchaser undertakes and passes initial training, and the proposed purchaser enters into a new franchise agreement with Bevaris Alliance. The franchisee must also provide a general release in favor of Bevaris Alliance and surrender all confidential information of a customer to Bevaris Alliance.
Furthermore, any transfer under this clause is subject to a Transfer Fee. Fifty percent of the Transfer Fee is due upon providing notice of the proposed transfer to Bevaris Alliance, and the remaining fifty percent is due upon Bevaris Alliance's execution of the new agreement with the transferee.