What are the requirements for the legend printed on the certificates of an entity to which a Buns On Fire franchise is transferred?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee is an individual, Franchisor hereby consents, upon thirty (30) days' prior written notice, to the assignment by Franchisee of all of the Franchisee's rights and benefits under this Agreement to a corporation or limited liability company of which Franchisee owns at least a majority of the voting and equity stock or membership interests, provided that:
- (i.) Such entity is newly organized, and its activities and corporate purposes are confined exclusively to acting as a Buns on Fire franchise under this Agreement;
- (ii.) Such entity and all stockholders or members thereof execute a Transfer of Franchise to a Corporation or Limited Liability Company form, or such other form as shall be provided or approved by Franchisor, in which they jointly and severally assume all of the past and future obligations of Franchisee under this Agreement, to the same extent as if they had originally executed this Agreement as Franchisee;
- (iii.) Franchisee or Franchisee's designated manager actively manages such entity and continues to devote his/her best efforts and full and exclusive time to the day-to-day operation and development of the franchise and the business of the Franchised Business and Franchisee shall remain personally liable in all respects under this Agreement, including but not limited to payment for the purchase of any of the Products, jointly and severally with such entity and any and all other stockholders or members thereof; and
- (iv.) All certificates of such entity bear the following legend, which shall be printed legibly and conspicuously on the front of each such certificate:
"The transfer of this certificate is subject to the terms and conditions of a certain Franchise Agreement entered into with SMYA Ventures LLC, dated , 20 ".
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
According to the 2025 Buns On Fire Franchise Disclosure Document, if a franchisee transfers their franchise to a corporation or limited liability company, there are specific requirements for the legend printed on the entity's certificates. This transfer is allowed if the franchisee owns at least a majority of the voting and equity stock or membership interests in the new entity.
The entity must be newly organized and exclusively focused on operating the Buns On Fire franchise. The entity and all its stockholders or members must sign a Transfer of Franchise form, assuming all past and future obligations of the franchisee as if they were the original franchisee. The original franchisee or their designated manager must actively manage the entity and dedicate their full time and effort to the franchise's operation. The franchisee remains personally liable under the Franchise Agreement, jointly with the entity and its stockholders or members, including for the purchase of products.
All certificates of the new entity must bear a specific legend printed legibly and conspicuously on the front. This legend states: "The transfer of this certificate is subject to the terms and conditions of a certain Franchise Agreement entered into with SMYA Ventures LLC, dated , 20 ". This requirement ensures that anyone holding a certificate of the entity is aware that the entity's operation is governed by the Buns On Fire Franchise Agreement. This is a standard practice to protect the franchisor's interests and maintain the integrity of the franchise system.