Does Bevaris Alliance have a right of first refusal to acquire a franchisee's Bevaris Alliance 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 retains the right of first refusal to acquire a franchisee's business. Specifically, Bevaris Alliance has the option to match any offer made for the purchase of a Bevaris Alliance franchise. This provision is detailed in Section 16.3 of the franchise agreement.
For a prospective franchisee, this means that if they decide to sell their Bevaris Alliance franchise, they must first offer Bevaris Alliance the opportunity to purchase the business on the same terms as any third-party offer. Bevaris Alliance can then choose to exercise its right and buy the franchise, effectively preventing the franchisee from selling to another buyer if Bevaris Alliance matches the offer.
Additionally, Section 16.7 outlines Bevaris Alliance's option to purchase the franchise upon transfer. In this case, the purchase price will be based on the fair market value of the business, excluding any value attributed to goodwill. Furthermore, Bevaris Alliance will not assume any of the franchisee's liabilities. This provides Bevaris Alliance with another avenue to acquire a franchise, albeit under different terms than the right of first refusal.
These provisions are important for potential franchisees to consider, as they impact the franchisee's ability to sell their business to a buyer of their choice and the valuation they might receive. It is advisable for prospective franchisees to carefully review Sections 16.3 and 16.7 of the franchise agreement to fully understand the implications of these rights retained by Bevaris Alliance.