Are there any restrictions on creating an encumbrance over the shares in the Franchisee by the Individual for a Bevaris Alliance franchise?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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.
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to the 2024 Bevaris Alliance Franchise Disclosure Document, there are restrictions regarding creating an encumbrance over the shares in the Franchisee by the Individual. Specifically, clause 16.1 states that the creation of any encumbrance over the shares in the Franchisee by the Individual may only occur in accordance with clause 16 and clause 17.
This means that a franchisee cannot freely create an encumbrance over their shares without adhering to specific procedures outlined in the franchise agreement. These procedures likely involve obtaining the franchisor's consent and fulfilling certain conditions.
Prospective franchisees should carefully review clauses 16 and 17 of the franchise agreement to fully understand the specific requirements and restrictions related to creating encumbrances over their shares. This will help them avoid potential breaches of the agreement and ensure compliance with Bevaris Alliance's policies.