Can Caring Senior Service enforce the agreement solely or jointly with the franchisee?
Caring_Senior_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
ARTICLE 17
PARTNERSHIP AND CORPORATE FRANCHISEES
If you or any successor thereof is a partnership, corporation or limited liability company, or if the franchise granted hereunder is assigned to a partnership, corporation or limited liability company pursuant to Article 16 hereof:
- (a) upon the execution of this Agreement (or, in the case of an assignment, upon such assignment) and subject to the provisions of Article 16 hereof, upon each transfer of an interest in this Agreement or in you, all holders of an interest in you shall execute a written agreement with us in the form required by us individually undertaking to be bound, jointly and severally, by all of the terms of this Agreement;
- (b) the articles of partnership, partnership agreement, articles of incorporation, bylaws, articles of organization, operating agreement and other organization documents shall recite that the issuance and transfer of any interest therein is restricted by the terms of Article 16 of this Agreement and copies thereof shall be furnished to us at our request. You shall also submit to us, at any time upon request, a list of names and addresses of all directors, officers, partners and members or beneficial shareholders reflecting their respective interests in you and other information regarding you, in such form as we may require;
- (c) upon the execution of this Agreement, provide us with a certificate of good standing or due organization of the franchisee business entity from the Secretary of State or applicable state agency;
- (d) upon the execution of this Agreement, provide a certified resolution by the board of directors or members authorizing the corporation, partnership, or limited liability company to enter into the Franchise Agreement with Caring Senior Service Franchise Partnership, L.P. and designating the name of the officer authorized to execute the Franchise Agreement on behalf of the corporation, partnership, or limited liability company.
- (e) upon the execution of this Agreement, provide a written document stating the name of the member, officer, director, or other principal responsible for the day-to-day operation of the Franchised Business; and
- (f) you, if you are a corporation, shall maintain stop transfer instructions against the transfer on your records of any securities with voting rights subject to the restrictions of Article 16 hereof and shall issue no such securities, nor permit any issued securities to remain outstanding, upon the face of which the following printed legend does not legibly and conspicuously appear: "The transfer of the shares represented by this certificate is subject to the terms and conditions of a Franchise Agreement with Caring Senior Service Franchise Partnership, L.P., dated ."
Source: Item 23 — RECEIPTS (FDD pages 53–204)
What This Means (2025 FDD)
Based on the 2025 Caring Senior Service Franchise Disclosure Document, if a franchisee is a partnership, corporation, or limited liability company, all holders of interest in the franchisee must execute a written agreement with Caring Senior Service, individually undertaking to be bound, jointly and severally, by all the terms of the agreement. This means that Caring Senior Service can enforce the agreement against the franchisee business entity and also against each individual holder of interest in that entity.
This requirement ensures that Caring Senior Service has recourse against both the business entity operating the franchise and the individuals who own and control it. This is a common practice in franchising to provide the franchisor with added security and accountability. The organizational documents of the franchisee must also state that the issuance and transfer of any interest therein is restricted by the terms of Article 16 of the agreement, and copies must be furnished to Caring Senior Service upon request.
Furthermore, Caring Senior Service requires a certificate of good standing or due organization of the franchisee business entity from the Secretary of State or applicable state agency. They also require a certified resolution by the board of directors or members authorizing the corporation, partnership, or limited liability company to enter into the Franchise Agreement, designating the officer authorized to execute the agreement. These measures ensure the legal standing and proper authorization of the franchisee entity.
If the franchisee is a corporation, it must maintain stop transfer instructions against the transfer of any securities with voting rights and include a legend on the securities indicating that their transfer is subject to the terms and conditions of the Franchise Agreement. This provision is designed to prevent unauthorized transfers of ownership that could violate the terms of the franchise agreement.