What is the Coffee News franchisee required to do if there is a change in stock ownership?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
- 11.3 Ownership Changes.
If Franchisee is a corporation or partnership, Franchisee agrees to notify Franchisor of any change in stock ownership or partnership interest in Franchisee while this Agreement is in effect.
Any such change which, together with all prior changes, results in a change of the person or persons having control of the entity shall be a transfer subject to the provisions of this paragraph 10 and its subparagraphs.
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
According to the 2025 Coffee News Franchise Disclosure Document, if a franchisee is a corporation or partnership, they must notify Coffee News of any change in stock ownership or partnership interest while the Franchise Agreement is in effect.
Furthermore, any change that, when combined with all prior changes, results in a change of the person or persons having control of the entity is considered a transfer. Such a transfer is subject to the provisions outlined in paragraph 10 of the agreement.
This means that if a change in ownership leads to a new controlling party, the franchisee must adhere to the standard transfer procedures, which likely involve obtaining Coffee News's approval and potentially executing a new franchise agreement. This provision ensures Coffee News maintains control over who operates its franchises and protects the brand's integrity.