What must the organizational documents of a Checkers franchisee recite regarding ownership interest?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
the articles of incorporation, partnership agreement or other organizational documents recite that the issuance, transfer or pledge of any direct or indirect legal or beneficial ownership interest is restricted by the terms of this Agreement; and (f) all
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certificates representing direct or indirect legal or beneficial ownership interests now or hereafter issued must bear a legend in conformity with applicable law reciting or referring to such restrictions.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, if a franchisee is a business corporation, partnership, limited liability company, or other legal entity, the organizational documents must explicitly state that the issuance, transfer, or pledge of any direct or indirect legal or beneficial ownership interest is restricted by the terms of the Franchise Agreement.
Furthermore, all certificates representing direct or indirect legal or beneficial ownership interests, whether issued now or in the future, must include a legend that complies with applicable law. This legend should either recite or refer to the restrictions on ownership interest as outlined in the Franchise Agreement.
These requirements ensure that Checkers maintains control over who can own or transfer ownership in a franchise, safeguarding the brand's integrity and consistency. Prospective franchisees should carefully review the Franchise Agreement and consult with legal counsel to fully understand these restrictions and ensure their organizational documents comply with Checkers' requirements.