What is prohibited regarding the transfer of shares in the Franchisee or the Franchisee's Business for a Bevaris Alliance franchise?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
exclusive property of the Franchisor. The Franchisee shall hold the Manual in safe custody at its own risk and maintained and kept in good condition by the Franchisee until returned to the Franchisor or destroyed at the option of the Franchisor in accordance with clause 19.3.
16. Sale of Business
- 16.1 Restrictions on sale of franchise business. No transfer of any shares in the Franchisee by the Individual or of the Franchisee's Business or any material part of the assets, rights or properties comprising the 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;
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to the 2024 Bevaris Alliance Franchise Disclosure Document, franchisees face restrictions on transferring shares in their franchise or the franchise's business. Specifically, franchisees cannot transfer shares in the Franchisee by the Individual or of the Franchisee's Business or any material part of the assets, rights or properties comprising the 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 clause 16 and clause 17.
If an individual franchisee wishes to transfer shares, they must first provide a Transfer Notice to Bevaris Alliance, detailing the proposed transfer, including the purchaser's name and the proposed sale price. This allows Bevaris Alliance to be informed of and potentially influence the transfer.
Additionally, the Franchisee is not allowed to issue any shares to anyone other than the Individual without getting written consent from Bevaris Alliance beforehand. This gives Bevaris Alliance control over who becomes a shareholder in the franchise, ensuring that new shareholders meet their standards. These restrictions are typical in franchising to maintain brand consistency and control over the network.