When transferring shares to the Bevaris Alliance Franchisor, how is the Proposed Sale Price determined?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
- (c) the words "and has received an offer from a bona fide third-party purchaser for the Sale Shares" shall be deemed deleted in respect of a proposed transfer to a Franchisor.
- (d) in the case of a transfer to a Franchisor (as opposed to a third-party purchaser) the Proposed Sale Price shall be the fair market value as determined by a certified public accounting firm selected by Franchisor.
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to Bevaris Alliance's 2024 Franchise Disclosure Document, when an individual franchisee wishes to transfer shares back to the franchisor, the price is not determined by a third-party offer. Instead, the "Proposed Sale Price" is defined as the fair market value.
To establish this fair market value, Bevaris Alliance selects a certified public accounting firm. This firm then assesses the business to determine its worth. This valuation approach ensures that the price is objective and based on the financial realities of the franchise, rather than a potentially inflated offer from an outside buyer.
For a prospective Bevaris Alliance franchisee, this means that selling shares back to the franchisor involves a professional valuation process. This may provide assurance that the price is fair, but it also removes the franchisee's ability to negotiate based on a third-party offer. It's important to understand the implications of this valuation method when considering the potential future sale of the franchise shares back to Bevaris Alliance.