What is the requirement for Bb.Q Chicken franchisees regarding stop-transfer instructions on equity securities if they are a corporation?

According to Bb.Q Chicken's 2025 Franchise Disclosure Document, if a franchisee is a corporation, they must maintain stop-transfer instructions against the transfer of any equity securities on their records. Additionally, each stock certificate representing stock in the corporation must have a conspicuous statement, in a form satisfactory to Bb.Q Chicken, indicating that it is subject to all restrictions imposed upon assignments by the Franchise Agreement. This requirement, however, does not apply to the transfer of equity securities of a publicly held corporation.

This provision ensures that Bb.Q Chicken maintains control over who becomes a franchisee and that transfers of ownership comply with the terms of the Franchise Agreement. By requiring stop-transfer instructions and conspicuous endorsements on stock certificates, Bb.Q Chicken aims to prevent unauthorized transfers of ownership that could potentially violate the agreement.

For a prospective Bb.Q Chicken franchisee, this means that if they choose to operate their franchise through a corporation, they must implement these measures to restrict the transfer of equity securities. This could involve working with legal counsel to ensure that the stop-transfer instructions and endorsements are properly implemented and comply with applicable laws. Franchisees should be aware of these requirements and factor them into their business planning and legal compliance efforts.

It is important to note the exception for publicly held corporations, indicating that these restrictions are primarily aimed at closely held or private corporations where ownership changes could have a more direct impact on the operation and management of the franchise. Franchisees should carefully review the Franchise Agreement and consult with Bb.Q Chicken to fully understand these requirements and their implications.