When transferring a Bevaris Alliance franchise, is it a condition of approval that the lender consents to the transfer?
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. |
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, lender consent is required for franchise transfer approval. Specifically, the FDD outlines several conditions that must be met for Bevaris Alliance to approve the transfer of a franchise. These conditions are detailed in Section 16.11 of the Franchise Agreement.
For a Bevaris Alliance franchisee looking to transfer their franchise, this means they must obtain consent from their lender as part of the transfer process. Other conditions include the transferee being approved by Bevaris Alliance, payment of a transfer fee, ensuring the transferee is not a competitor, keeping the franchisee's account current, securing a release from the franchisee, and ensuring the transferee signs all necessary documents, including subordination agreements.
The requirement for lender consent is a fairly standard practice in franchising, particularly when the existing franchise has outstanding loans or financial obligations. This provision protects the lender's interests by ensuring that the transfer does not negatively impact their collateral or repayment prospects. Prospective franchisees should be aware of these conditions and factor them into their plans for potentially transferring the franchise in the future.
It is important for prospective Bevaris Alliance franchisees to carefully review Section 16.11 of the Franchise Agreement to fully understand all the conditions for transfer. They should also communicate with their lender early in the transfer process to address any concerns and obtain the necessary consent in a timely manner.