What information must a Chocolate Fish Coffee transferee provide when transferring for convenience of ownership?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.3 Transfer for Convenience of Ownership. If Franchisee is an individual, Franchisee may Transfer this Agreement to a corporation or limited liability company formed for the convenience of ownership after at least 15 days' notice to Chocolate Fish Franchising, if, prior to the Transfer: (1) the transferee provides the information required by Section 2.3; (2) Franchisee provides copies of the entity's charter documents, by-laws (or operating agreement) and similar documents, if requested by Chocolate Fish Franchising, (3) Franchisee owns all voting securities of the corporation or limited liability company, and (4) Franchisee provides a guaranty in accordance with Section 2.5.
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, a franchisee may transfer their agreement to a corporation or limited liability company for convenience of ownership after providing at least 15 days' notice to Chocolate Fish Coffee. Prior to the transfer, the transferee must provide the information required by Section 2.3 of the agreement. The franchisee must also provide copies of the entity's charter documents, by-laws (or operating agreement), and similar documents if requested by Chocolate Fish Coffee.
To complete the transfer, the franchisee must own all voting securities of the corporation or limited liability company. Additionally, the franchisee must provide a guaranty in accordance with Section 2.5 of the franchise agreement.
In practical terms, this means a Chocolate Fish Coffee franchisee looking to change their business structure needs to supply Chocolate Fish Coffee with detailed information about the new entity, including ownership and operational documents. They must also personally guarantee the entity's obligations under the Franchise Agreement. This ensures Chocolate Fish Coffee has a clear understanding of the new ownership structure and maintains a level of financial security through the personal guaranty.