Does Bevaris Alliance have the right to approve all transfers of franchises?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| which must be approved by us. | ||
| l. Bevaris approval of transfer | Section | We have the right to approve all transfers, which shall be |
| by franchisee | 16.11 | subject to the provisions of the Franchise Agreement. |
| m. Conditions for Bevaris approval of transfer | Section 16.11 | Transferee approved by us, transfer fee paid, transferee not competitor, your account is current, you sign a release, transferee signs all documents, lender consents, and subordination agreements. |
| 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 retains the right to approve all franchise transfers. Specifically, Section 16.11 of the Franchise Agreement details Bevaris Alliance's approval process for transfers. This means that a franchisee cannot sell or transfer their franchise to just anyone; they must first obtain approval from Bevaris Alliance. This provision is typical in franchising, as it allows the franchisor to maintain control over the quality and consistency of its brand.
Several conditions must be met for Bevaris Alliance to approve a transfer. The potential transferee must be approved by Bevaris Alliance, and a transfer fee must be paid. Additionally, the transferee cannot be a competitor, and the franchisee's account must be current. The franchisee must also sign a release, and the transferee must sign all required documents. If there is a lender involved, their consent and any necessary subordination agreements must also be secured. These conditions ensure that any new franchisee meets Bevaris Alliance's standards and that the transfer is financially sound.
Furthermore, Bevaris Alliance has the right of first refusal to acquire the franchisee's business. According to Section 16.3 of the Franchise Agreement, Bevaris Alliance can match any offer made for the purchase of the franchise. This gives Bevaris Alliance the option to buy back the franchise rather than approve a transfer to a third party. If Bevaris Alliance chooses to purchase the business, Section 16.7 states that the purchase will be at fair market value, excluding any value for goodwill, and will require legal compliance with no assumption of the franchisee's liabilities. This clause protects Bevaris Alliance's interests and allows them to strategically manage their franchise network.