What specific wording must be included as a legend on all securities issued by a Dryject franchisee that is not an individual?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
- (viii) You shall not issue any additional stock, membership, or interests in You and no individual with ownership interest in You shall transfer, assign or pledge any ownership interest in You without Our prior written consent, which shall not be unreasonably withheld, and a legend setting forth such restriction on transfers shall be contained in the business entity's organizational and governing documents and other appropriate documents such as certificates and stocks. In giving Our consent, We shall have the right
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, if a franchisee is a business entity, they cannot issue additional stock, membership, or interests in the entity without Dryject's prior written consent. Furthermore, any individual with ownership interest cannot transfer, assign, or pledge their ownership interest without Dryject's prior written consent. To enforce this, a legend restricting transfers must be included in the business entity's organizational and governing documents, as well as other relevant documents like certificates and stocks. The FDD does not specify the exact wording of the legend.
This requirement ensures that Dryject maintains control over who owns and operates its franchises. By requiring consent for any changes in ownership, Dryject can vet potential new owners and ensure they meet the company's standards. This protects the brand's reputation and the interests of other franchisees.
Since the specific wording for the legend is not provided in the FDD, a prospective franchisee should ask Dryject for the exact language required. This will ensure compliance with the franchise agreement and avoid potential disputes in the future.