What documents must a Desi District franchisee provide to Desi District Franchise Group when transferring the agreement for convenience of ownership?
Desi_District 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 Desi District Franchise Group, 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 Desi District Franchise Group, (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 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, a franchisee who is an individual may transfer the franchise agreement to a corporation or limited liability company formed for convenience of ownership after providing at least 15 days' notice to Desi District Franchise Group.
Prior to the transfer, the franchisee must ensure that the transferee provides the information required by Section 2.3 of the franchise agreement. The franchisee must also provide copies of the entity's charter documents, by-laws (or operating agreement), and similar documents if requested by Desi District Franchise Group. Additionally, the franchisee must own all voting securities of the corporation or limited liability company. Finally, the franchisee must provide a guaranty in accordance with Section 2.5 of the franchise agreement.
It is important to note that these requirements are specific to transfers for convenience of ownership. Other types of transfers, such as those upon death or incapacity or those to a third party, may have different requirements. A prospective franchisee should carefully review Article 15 of the franchise agreement to understand the specific requirements for each type of transfer.