If the Cinch I.T. franchisee is a business entity, must it be newly formed?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
- (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. Further, You represent, warrant and covenant that:
- (i) You are newly formed, duly organized and validly exist under the laws of the state in which You were formed;
- (ii) You are duly qualified and are authorized to do business in each jurisdiction in which Your business activities or the nature of the properties owned by You require such qualification;
- (iii) The execution of and transactions contemplated by this Agreement are within Your powers;
- (iv) The ownership interests in You are accurately and fully listed in Addendum D;
- (v) Each and every person with an ownership interest in You shall sign the Guaranty Agreement attached to this Agreement as Addendum C and You shall provide the original signed Guaranty Agreement to Us;
- (vi) The stated purpose of the business entity shall consist only of the development, ownership, operation and maintenance of the CINCH I.T. Franchised Business;
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, if the franchisee is a business entity, it must be newly formed. The FDD specifies that if the franchisee is a business entity such as a corporation, limited liability company, partnership, limited liability partnership, or trust, it must be newly formed.
In addition to being newly formed, the business entity must complete and sign the Principal Owner's Statement (Addendum D), and each individual with an ownership interest must also sign Addendum D. The business entity must be duly organized and validly exist under the laws of the state in which it was formed and be authorized to do business in each jurisdiction where its activities or properties require such qualification.
The business entity must ensure that the execution of and transactions contemplated by the Franchise Agreement are within its powers. The ownership interests in the entity must be accurately and fully listed in Addendum D. Each person with an ownership interest must sign the Guaranty Agreement (Addendum C) and provide the original signed agreement to Cinch I.T. The stated purpose of the business entity must consist only of the development, ownership, operation, and maintenance of the Cinch I.T. Franchised Business.