In a transfer of shares or assets to Bevaris Alliance, are the shares or assets sold free from encumbrances?

According to Bevaris Alliance's 2024 Franchise Disclosure Document, any transfer of shares or assets to Bevaris Alliance includes a warranty from the Individual and the Franchisee. This warranty confirms, on a joint and several basis, that the shares or assets are sold with full title guarantee and are free from encumbrances. This means that when a franchisee transfers shares or assets back to Bevaris Alliance, they must guarantee that they have clear ownership of those assets and that there are no outstanding liens, claims, or other legal impediments against them.

This provision protects Bevaris Alliance from acquiring assets or shares that have existing financial or legal burdens. For a prospective franchisee, this implies a responsibility to ensure that their business assets and shares are free of any encumbrances before attempting to transfer them to Bevaris Alliance. Failure to do so could result in a breach of warranty, leading to potential legal and financial repercussions.

The FDD also states that any transfer under clause 16 is subject to a Transfer Fee. Fifty percent of the Transfer Fee is due upon the Franchisee's providing notice of the proposed transfer to Bevaris Alliance, and the remaining fifty percent is due upon Bevaris Alliance's execution of the new agreement with the transferee. This fee structure adds another layer to the transfer process, requiring franchisees to account for these costs when considering a transfer of ownership.

In summary, this clause ensures that Bevaris Alliance receives clear title to any acquired shares or assets, safeguarding the company's interests. Franchisees need to be aware of this requirement and the associated Transfer Fee to ensure a smooth and legally sound transfer process.