How does the Clean Your Dirty Face franchise agreement define 'interest' in the context of ownership?
Clean_Your_Dirty_Face Franchise · 2025 FDDAnswer from 2025 FDD Document
d, or completed actions that require our approval. The headings of the sections and paragraphs are for convenience only and do not define, limit, or construe the contents of these sections or paragraphs.
References in this Agreement to "we," "us," and "our," with respect to all of our rights and all of your obligations to us under this Agreement, include any of our affiliates with whom you deal. The term "affiliate" means any person or entity directly or indirectly owned or controlled by, under common control with, or owning or controlling you or us. The term "control" means the power to direct or cause the direction of management and policies. The use of the term "including" in this Agreement, means in each case "including, without limitation".
If two or more persons are at any time the owners of your Business, whether as partners or joint venturers, their obligations and liabilities to us will be joint and several. References to "owner" mean any person holding a direct or indirect ownership interest (whether of record, beneficially, or otherwise) or voting rights in you (or a transferee of this Agreement and your Business or an ownership interest in you), including any person who has a direct or indirect interest in you (or a transferee), this Agreement or your Business and any person who has any other legal or equitable interest, or the power to vest in himself or herself any legal or equitable interest, in their revenue, profits, rights, or assets.
References to a "controlling ownership interest" in you or one of your owners (if an Entity) mean the percent of the voting shares or other voting rights that results from dividing one hundred percent (100%) of the ownership interests by the number of owners. In the case of a proposed transfer of an ownership interest in you or one of your owners, the determination of whether a "controlling ownership interest" is involved must be made as of both immediately before and immediately after the proposed transfer to see if a "controlling ownership interest" will be transferred (because of the number of owners before the proposed transfer) or will be deemed to have been transferred (because of the number of owners after the proposed transfer).
All amounts payable by you or your owners to us or our affiliates must be in United States Dollar
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to Clean Your Dirty Face's 2025 Franchise Disclosure Document, the term 'owner' is defined as any individual or entity holding a direct or indirect ownership interest or voting rights in the franchisee. This includes those with record, beneficial, or other ownership types. The definition extends to anyone with a direct or indirect interest in the franchisee, the Franchise Agreement, or the business itself, as well as those with legal or equitable interests in the revenue, profits, rights, or assets of the business.
This broad definition has significant implications for prospective Clean Your Dirty Face franchisees. It means that any individual or entity with a stake in the franchise, regardless of the nature of that stake, is subject to the franchisor's control and regulations. This could include silent partners, investors, or even family members who have a financial interest in the business. All such parties are bound by the terms of the Franchise Agreement, even if they are not directly involved in the day-to-day operations.
The Franchise Agreement also defines a 'controlling ownership interest' as the percentage of voting shares or other voting rights resulting from dividing 100% of the ownership interests by the number of owners. This is relevant when considering the transfer of ownership. The determination of whether a controlling ownership interest is involved must be made both before and after the proposed transfer. This ensures that Clean Your Dirty Face retains control over who has significant influence within the franchise.
Clean Your Dirty Face requires that all amounts payable by the franchisee or its owners to the franchisor or its affiliates must be in United States Dollars. This eliminates any ambiguity regarding currency exchange rates and ensures that all financial transactions are conducted in a standardized manner. This requirement is fairly standard in franchise agreements to simplify accounting and financial reporting.