Regarding the transfer of B Bops development rights, what section outlines the requirements for ownership by an entity?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
ENTITY DEVELOPER.
In the event Developer is a corporation, partnership (general or limited) or limited liability company on the effective date of this Agreement, or if the development rights or any ownership interest in Developer is thereafter transferred to a corporation, partnership or limited liability company in accordance with the provisions of Section 13 hereof, such entity shall comply with the following:
(1) The entity shall be newly organized and its activities shall be confined exclusively to the development and operation of one or more Units pursuant to the terms of this Agreement and any Unit Franchise Agreements between the parties;
(2) The governing documents of such entity shall provide that the issuance or transfer of any ownership interests in such entity shall be subject to the restrictions contained in this Agreement;
(3) Any stock certificate or other evidence of ownership issued by such entity shall have conspicuously endorsed upon it a statement that it is held subject to, and that further assignment or transfer thereof is subject to, all restrictions imposed upon transfer by this Agreement;
(4) Any person who is or becomes the holder of a controlling interest in such entity or who has any responsibility for management of Developer, shall at the direction of Company execute a guaranty agreeing to be personally bound by the provisions of this Agreement; and
(5) At the request of Company, such entity shall furnish to Company a certified copy of its governing documents and/or a list of all owners indicating their respective ownership interests in the entity.
Source: Item 23 — RECEIPTS (FDD pages 53–145)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, Section 14, titled "ENTITY DEVELOPER," outlines the requirements if the Developer is a corporation, partnership, or limited liability company on the effective date of the agreement, or if the development rights or any ownership interest in Developer is transferred to such an entity.
These requirements include that the entity must be newly organized and dedicated exclusively to the development and operation of B Bops Units under the agreement. The entity's governing documents must state that any ownership interest transfers are subject to the restrictions in the agreement. Additionally, any stock certificates or ownership evidence must be endorsed with a statement indicating that they are subject to transfer restrictions imposed by the agreement.
Furthermore, any person holding a controlling interest or management responsibility within the Developer entity may be required by B Bops to execute a guaranty, agreeing to be personally bound by the agreement's provisions. At B Bops's request, the entity must also provide certified copies of its governing documents and a list of all owners with their respective ownership interests.