If a Burros Fries franchisee is a business trust, what document must it furnish to the franchisor?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
If Franchisee is or becomes a corporation, limited liability company, limited liability partnership, general partnership or other organization or entity, the following requirements shall apply:
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- Franchisee shall confine its activities to the establishment and operation of the Business;
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- Franchisee's Certificate, Articles of Incorporation or Articles of Organization, Certificate of Formation, Shareholders Agreement, Operating Agreement, Partnership Agreement, Business Trust Agreement, and/or Bylaws (or comparable governing documents) shall at all times provide that its activities are confined exclusively to the operation of the Business and that the issuance, redemption, purchase for cancellation and transfer of voting stock, or other ownership interest therein, is restricted by the terms of this Agreement. Franchisee shall furnish us promptly upon request copies of Franchisee's Certificate of Formation, Articles of Incorporation, Bylaws, Operating Agreement, Partnership Agreement, Business Trust Agreement, Shareholders Agreement, and other governing documents, and any other documents we may reasonably request, and any amendments thereto, from time to time;
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- Franchisee shall maintain a current list of all owners of record and beneficial owners of any class of voting stock or other ownership interest in Franchisee and shall furnish such list to us upon request;
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, if a franchisee is a business trust, they must furnish the Business Trust Agreement to Burros Fries. This requirement is part of a broader set of obligations for franchisees that operate under various business structures such as corporations, limited liability companies, or partnerships.
Burros Fries requires franchisees operating as business entities to confine their activities strictly to the operation of the Burros Fries business. The governing documents of the entity, such as the Business Trust Agreement, must reflect this restriction. This ensures that the franchisee's focus remains solely on the Burros Fries franchise, preventing potential conflicts of interest or diversion of resources to other ventures.
In addition to the Business Trust Agreement, Burros Fries can request copies of the Franchisee's Certificate of Formation, Articles of Incorporation, Bylaws, Operating Agreement, Partnership Agreement, Shareholders Agreement, and other governing documents, including any amendments. Franchisees must also maintain a current list of all record and beneficial owners of any voting stock or ownership interest and provide it upon request. This comprehensive oversight allows Burros Fries to maintain control over the franchise's operations and ownership structure, ensuring compliance with the franchise agreement and protecting the brand's integrity.