Under what conditions is a transfer of shares in the Franchisee by the Individual or of the Franchisee's Business by the Franchisor or Individual of Bevaris Alliance allowed?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
exclusive property of the Franchisor. The Franchisee shall hold the Manual in safe custody at its own risk and maintained and kept in good condition by the Franchisee until returned to the Franchisor or destroyed at the option of the Franchisor in accordance with clause 19.3.
16. Sale of Business
- 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.
- 16.2 Share transfer notice. If the Individual wishes to transfer its shares in the Franchisee (Sale Shares) to a third party and has received an offer from a bona fide third-party purchaser for the Sale Shares, the Individual must first give a Transfer Notice to the Franchisor (giving details of the proposed transfer including):
- (a) the name of the proposed purchaser; and
- (b) the price (in cash) that the proposed purchaser has offered to pay for the Sale Shares (Proposed Sale Price).
- 16.3 Purchase notice. Within 20 Business Days of receipt (or deemed receipt) of a Transfer Notice, the Franchisor shall be entitled (but not obliged) to give notice in writing to the Individual that it wishes to purchase the Sale Shares at the Proposed Sale Price (Purchase Notice), in which case the Franchisor is bound to buy and the Individual is bound to sell all of the Sale Shares at the Proposed Sale Price, with such sale to complete within 20 Business Days of receipt (or deemed receipt) of the Purchase Notice.
- 16.4 Transfer where no Purchase Notice given. If, at the expiration of the initial period specified in clause 16.3, the Franchisor has not given a Purchase Notice, the Franchisee may transfer the Sale Shares to the proposed purchaser identified in the Transfer Notice at a price not less than the Proposed Sale Price provided that it does so within 60 days of the expiration of the initial 20 Business Day period specified in clause 16.3 and the criteria set out in clause 16.11 are satisfied.
- 16.5 Entire share transfer for cash only. The Individual shall not be permitted to transfer some only of its shares. Any transfer must be of the entire issued share capital of the Franchisee in accordance with this clause 16 and shall be for cash consideration only.
- 16.6 Asset Transfer Notice. If the Franchisee wishes to transfer the Franchisee's Business to a third party and has received an offer from a bona fide third-party purchaser for the Franchisee's Business, the Franchisee must first give an Asset Transfer Notice to the Franchisor giving details of the proposed transfer including:
- (a) the name of the proposed purchaser; and
- (b) the price (in cash) that the proposed purchaser has offered to pay for the Franchisee's Business (Proposed Asset Sale Price).
- 16.7 Asset Purchase Notice. Within 20 Business Days of receipt (or deemed receipt) of an Asset Transfer Notice, the Franchisor shall be entitled (but not obliged) to give notice in writing to the Seller that it wishes to purchase the Franchisee's Business at the Proposed Asset Sale Price (Asset Purchase Notice), in which case the Franchisor is bound to buy and the Franchisee is bound to sell the Franchisee's Business at the Proposed Asset Sale Price, with such sale to complete within 20 Business Days of receipt (or deemed receipt) of the Asset Purchase Notice.
- 16.8 Transfer of Franchisee's Business third party. If, at the expiration of the initial period specified in clause 16.7, the Franchisor has not given an Asset Purchase Notice, the Franchisee may transfer the Franchisee's Business to the third party purchaser identified in the Asset Transfer Notice at a price not less than the Proposed Asset Sale Price provided that it does so within 60 days of the expiration of the initial 20 Business Day period specified in clause 16.7 and the criteria set out in clause 16.11 are satisfied.
- 16.9 Entire business transfer for cash only. The Franchisee shall not be permitted to transfer part only of the Franchisee's Business. Any transfer must be of the whole of the assets, rights and properties comprising the Franchisee's Business, transferred as a going concern, and shall be for cash consideration only.
- 16.10 Business data disclosure. The Franchisee and the Individual shall give the Franchisor such information concerning the Sale Shares and Franchisee's Business as the Franchisor requests in order to assist it in making its decision as to whether to exercise its rights under this clause 16 as soon as reasonably possible following such request, and warrants that such information shall be true, complete and accurate in all material respects, with such warranty being repeated at completion of any transfer of the Sale Shares or the Franchisor's Business to the Franchisor in accordance with this clause 16.
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to Bevaris Alliance's 2024 Franchise Disclosure Document, the transfer of shares in the Franchisee by the Individual or of the Franchisee's Business is subject to specific conditions outlined in Clause 16. No transfer of shares or the Franchisee's Business can occur unless it complies with Clauses 16 and 17. If the Individual wishes to transfer shares, they must provide a Transfer Notice to Bevaris Alliance, including the proposed purchaser's name and the cash price offered for the shares.
Bevaris Alliance has the option to purchase the shares at the Proposed Sale Price by providing a Purchase Notice within 20 business days of receiving the Transfer Notice. If Bevaris Alliance does not issue a Purchase Notice within that period, the Individual may transfer the shares to the proposed purchaser within 60 days, provided the criteria in clause 16.11 are met. Any share transfer must be for the entire issued share capital of the Franchisee and for cash consideration only. The Franchisee must provide an Asset Transfer Notice to Bevaris Alliance, including the proposed purchaser's name and the cash price offered for the business.
Clause 16.11 lists transfer criteria that must be met for a third party. These include Bevaris Alliance providing written consent to the transfer, the Franchisee and Individual complying with all agreement terms, the proposed purchaser meeting Bevaris Alliance's standards for business experience, financial standing, and recruitment. Additionally, all monies due to Bevaris Alliance must be paid, the proposed purchaser must undertake and pass initial training, and enter into a new franchise agreement with Bevaris Alliance. The Franchisee must also provide a general release in favor of Bevaris Alliance and its Customers, surrender all Confidential Information of a Customer to Franchisor and permanently delete all Confidential Information of a Customer from Franchisee's computer systems and records. Any transfer is subject to a Transfer Fee, with fifty percent due upon notice of the proposed transfer and the remaining fifty percent due upon Bevaris Alliance's execution of the new agreement with the transferee.