How does the admission of an additional general partner affect the Amorino Area Developer Agreement?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
(c) If Area Developer is a corporation, or a limited or general partnership, each of the following shall be deemed to be an assignment of this Agreement within the meaning of this Section, the death or legal incapacity of any shareholder owning twenty percent (20%) or more of the capital stock or voting power of Area Developer; (ii) if Area Developer is a general or limited partnership, the withdrawal, death or legal incapacity of a general partner, or a limited partner owning twenty percent (20%) or more of the voting power, property, profits or losses, of the partnership, or the admission of any additional general partner or transfer by any general partner of its interest in the property, management or profits and/or losses of the partnership; (iii) the issuance of any securities by Area Developer which itself or in combination with any other transaction(s) results in the shareholders or partners existing as of the Effective Date, as applicable, owning less than eighty percent (80%) of the outstanding shares or voting power of a corporate Area Franchise, or of the voting power or interests in the property, profits or losses of a limited partnership; (iv) the transfer of twenty percent (20%) or more in the aggregate of the capital stock or voting power of Area Developer, by operation of law or otherwise; and (v) any
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, if the Area Developer is a general or limited partnership, the admission of any additional general partner is considered an assignment of the Area Developer Agreement. This means that the admission of a new general partner triggers the assignment clause within the agreement.
This assignment is significant because Amorino must provide prior written consent for any assignment or transfer of the Area Developer's interest in the agreement. Amorino has the right to withhold consent for any reason. If the company does not consent to the admission of the new general partner, the attempted assignment or transfer is considered null and void, potentially jeopardizing the Area Developer's rights under the agreement.
Furthermore, any assignment of the Area Developer Agreement is subject to Amorino's right of first refusal. This means that before the Area Developer can proceed with the admission of a new general partner, Amorino has the option to take over the Area Developer's interest in the agreement itself. This provision gives Amorino significant control over who becomes an Area Developer within its franchise system and ensures that any changes in ownership or management align with its strategic interests.