What ownership forms are available for a Desi District franchisee?
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.
15.4 Transfer upon Death or Incapacity. Upon the death or incapacity of Franchisee (or, if Franchisee is an entity, the Owner with the largest ownership interest in Franchisee), the executor, administrator, or personal representative of that person must Transfer the Business to a third party approved by Desi District Franchise Group (or to another person who was an Owner at the time of death or incapacity of the largest Owner) within nine months after death or incapacity.
Such transfer must comply with Section 15.2.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to the 2024 Desi District Franchise Disclosure Document, a franchisee who is an individual may transfer the agreement to a corporation or limited liability company (LLC) for ownership convenience. This transfer requires at least 15 days' notice to Desi District.
To complete the transfer, the transferee must provide the information required by Section 2.3 of the agreement. The franchisee must provide copies of the entity's charter documents, by-laws (or operating agreement), and similar documents if requested by Desi District. The franchisee must own all voting securities of the corporation or LLC and provide a guaranty in accordance with Section 2.5.
If the franchisee dies or becomes incapacitated, or if the owner with the largest ownership interest in an entity franchisee dies or becomes incapacitated, the executor, administrator, or personal representative must transfer the business within nine months. The transfer must be to a third party approved by Desi District or to another person who was an owner at the time of death or incapacity of the largest owner, and it must comply with Section 15.2 of the franchise agreement.