What constitutes an 'Affiliate' of a Byrider franchisee, specifically regarding ownership interest and voting rights?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.2 Affiliate. The term "affiliate" shall mean a person or other legal entity in which Franchisee or its owners (i) own more than 10% of the issued and outstanding ownership interest and voting rights or (ii) have the right and power to control and determine the affiliate's management and policies.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, an 'affiliate' is defined in relation to the franchisee or its owners.
Specifically, an entity is considered an affiliate of a Byrider franchisee if the franchisee or its owners meet either of the following conditions: they own more than 10% of the issued and outstanding ownership interest and voting rights in the entity, or they possess the right and power to control and determine the affiliate's management and policies.
This definition is important because it clarifies the scope of Byrider's control and influence over related entities. It also has implications for potential conflicts of interest, as Byrider may scrutinize transactions or relationships between the franchisee and its affiliates to ensure compliance with the franchise agreement and to protect the Byrider brand and system. Franchisees should be aware of this definition and how it may impact their business dealings with other entities.