Can Beverly Anns Cookie enforce the Owners' obligations before pursuing the Franchisee?
Beverly_Anns_Cookie Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.1.2 Company Documents. At our request, you will furnish copies of all documents and contracts governing the rights and obligations of your Owners (such as, Articles of Incorporation or Organization and partnership, operating or shareholder agreements or similar documents, the "Company Documents"). You will not alter, change, or amend your Company Documents, without obtaining our prior written approval, which approval we will not unreasonably deny or withhold, and will grant if such changes will not prevent you from performing your obligations under this Franchise Agreement.
- 3.1.3 Transfer Restrictions. Your Company Documents will recite that this Franchise Agreement restricts the issuance and transfer of any ownership interests in you, and all certificates and other documents representing ownership interests in you will bear a legend referring to this Franchise Agreement's restrictions. Any claim, defense or cause of action you or an Owner may have against us, regardless of cause or origin, cannot be used as a defense against our enforcement of the Brand Covenants.
Source: Item 23 — RECEIPTS (FDD pages 57–235)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Beverly Anns Cookie can enforce the obligations of the Owners. The franchisee must furnish copies of all documents and contracts governing the rights and obligations of the Owners, such as Articles of Incorporation or Organization, partnership, operating or shareholder agreements. These are referred to as "Company Documents".
The franchisee cannot alter, change, or amend their Company Documents without prior written approval from Beverly Anns Cookie, which will not be unreasonably denied or withheld if the changes do not prevent the franchisee from fulfilling their obligations under the Franchise Agreement. The Company Documents must state that the Franchise Agreement restricts the issuance and transfer of any ownership interests in the franchisee, and all documents representing ownership interests must bear a legend referring to these restrictions.
Any claim, defense, or cause of action the franchisee or an Owner may have against Beverly Anns Cookie cannot be used as a defense against the enforcement of the Brand Covenants. This indicates that Beverly Anns Cookie has the right to enforce the obligations outlined in the Brand Covenants against both the franchisee and the Owners, without needing to pursue the franchisee first.