Must a transferee be approved by Bevaris Alliance for a franchise transfer to be valid?
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. |
| p. Death or disability of | Section 17 | Franchise may be assigned by estate to approve transferee |
| franchisee | in three months. |
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. This requirement is detailed in Section 16.11 of the Franchise Agreement. This means that if a franchisee wishes to sell or transfer their franchise to another party, Bevaris Alliance must first give its approval for the transfer to proceed.
Several conditions must be met for Bevaris Alliance to approve a transfer. These conditions include the proposed transferee being approved by Bevaris Alliance, payment of a transfer fee, and ensuring the transferee is not a competitor. Additionally, the franchisee's account must be current, and both the franchisee and transferee must sign releases and all required documents. If there is a lender involved, their consent and any necessary subordination agreements must also be obtained.
Bevaris Alliance also 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. Furthermore, under Section 16.7, Bevaris Alliance has the option to purchase the business upon transfer, with the purchase price based on fair market value, excluding any value for goodwill, and subject to legal compliance and no assumption of the franchisee's liabilities. In the event of the death or disability of the franchisee, Section 17 allows the franchise to be assigned by the estate to an approved transferee within three months.