For Bevaris Alliance, what does the term 'Asset Purchase Notice' refer to?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
Asset Purchase Notice: means the notice referred to in clause 16.7.
- 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 Bevaris Alliance's 2024 Franchise Disclosure Document, an 'Asset Purchase Notice' is a specific notice related to the potential sale of a franchisee's business. The document defines it as the notice referred to in clause 16.7 of the franchise agreement. This clause outlines the process by which Bevaris Alliance, the franchisor, has the option to purchase the franchisee's business if the franchisee intends to sell it to a third party.
Specifically, if a franchisee receives an offer from a third party to purchase their Bevaris Alliance business, they must first provide an 'Asset Transfer Notice' to Bevaris Alliance, detailing the proposed sale, including the purchaser's name and the proposed purchase price. Upon receiving this notice, Bevaris Alliance has 20 business days to issue an 'Asset Purchase Notice' to the franchisee, indicating their intent to buy the business at the price offered by the third party.
If Bevaris Alliance issues an 'Asset Purchase Notice', the franchisee is then obligated to sell the business to Bevaris Alliance at the agreed-upon price, with the sale to be completed within 20 business days of the notice. However, if Bevaris Alliance does not issue an 'Asset Purchase Notice' within the initial 20-day period, the franchisee is then free to proceed with the sale to the third party, provided the sale occurs within 60 days of the initial 20-day period's expiration and meets other specified criteria.
This clause gives Bevaris Alliance the right of first refusal, a common practice in franchising that allows the franchisor to maintain control over who enters the system and ensures brand consistency. For a prospective franchisee, this means that selling their Bevaris Alliance business may involve a period where the franchisor can step in and purchase the business themselves, potentially affecting the timing and terms of the sale.