If the Cinch I.T. franchisee is a business entity, what must be included in Addendum D?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
our personal attributes and in consideration of the trust and confidence which We place in You, and on Your representation that You will actively and substantially participate personally in the beneficial ownership and management of the CINCH I.T. Franchised Business.
- (b) In the event You are a business entity (including but not limited to a corporation, a limited liability company, a partnership, a limited liability partnership, a trust), in addition to being newly formed, You must complete and sign the Principal Owner's Statement attached to this Agreement as Addendum D and each individual with an ownership interest in You must also sign Addendum D.
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, if a franchisee is a business entity, they must complete and sign the Principal Owner's Statement, which is included as Addendum D to the franchise agreement. Additionally, each individual with an ownership interest in the business entity must also sign Addendum D.
This requirement ensures that Cinch I.T. has a clear understanding of the ownership structure of its franchisees. By requiring all owners to sign Addendum D, Cinch I.T. can directly communicate with and hold accountable all individuals with a vested interest in the franchise. This is particularly important for maintaining brand standards and ensuring compliance with the franchise agreement.
Furthermore, the FDD states that the ownership interests in the business entity must be accurately and fully listed in Addendum D. This provision aims to prevent hidden ownership or undisclosed control, ensuring transparency in the franchise relationship. Cinch I.T. also requires that each person with an ownership interest in the business entity sign the Guaranty Agreement attached as Addendum C.
In summary, Addendum D serves as a critical document for Cinch I.T. when the franchisee is a business entity, providing transparency about the ownership structure and ensuring that all owners are aware of their responsibilities and obligations under the franchise agreement.