If the Dryject franchisee is not an individual, what documents must reflect restrictions on the issuance and transfer of voting stock or ownership interest?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
umbrance to occur, by operation of law or otherwise, without obtaining Our prior written consent and complying with the terms of Section 31.
- (b) In the event You or Your successor is not an individual, You agree and acknowledge as follows:
- (i) The Articles of Incorporation (or other corporate charter pursuant to which You were formed) and the Bylaws or Operating Agreement (or regulations or other instrument for the governance of the entity), or the Partnership Agreement, or other instruments pursuant to which You were created, reflects that the issuance and transfer of voting stock or other ownership interest therein ("securities") is restricted by the terms of this Agreement. You shall furnish Us at the time of execution of this Agreement or of assignment to the corporation, limited liability company, partnership or other entity, an agreement executed by all stockholders, partners, members and other owners of any equity interest in You, stating that none of such entities will sell, assign or transfer voluntarily or by operation of law any securities of Franchisee to any other entity, other than existing stockholders or partners to the extent permitted hereunder, without Our prior written consent.
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, if the franchisee is a business entity, the restrictions on the issuance and transfer of voting stock or other ownership interest must be reflected in specific organizational documents. These documents include the Articles of Incorporation (or other corporate charter), Bylaws or Operating Agreement (or regulations or other instrument for the governance of the entity), or the Partnership Agreement, or other instruments pursuant to which the franchisee was created.
Dryject requires that these documents explicitly state that the issuance and transfer of voting stock or other ownership interests are restricted by the terms of the franchise agreement. Additionally, Dryject requires an agreement executed by all stockholders, partners, members, and other owners of any equity interest in the franchisee, stating that they will not sell, assign, or transfer any securities of the franchisee to any other entity without Dryject's prior written consent. This agreement must be furnished to Dryject at the time of execution of the Franchise Agreement or of assignment to the business entity.
Furthermore, all securities issued by the franchisee must bear a legend in a form prescribed by Dryject, printed legibly and conspicuously, indicating the restrictions on transfer. A stop transfer order must also be in effect against the transfer of any securities on the franchisee's records, except for transfers permitted by the Franchise Agreement. This ensures that Dryject maintains control over who owns and manages its franchises, protecting the brand and franchise system.