What documentation must an Ella Cafe developer provide to transfer their interest to a business entity?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
- 8.2. Transfer by Individual Developer to Business Entity for Convenience. If Developer is an individual or individuals, Developer may transfer its interest in this Agreement to a Business Entity for convenience of operation by signing Franchisor's form of assignment and assumption agreement if: (a) the Business Entity is formed solely for purposes of developing and/or operating Coffee Houses; (b) Developer provides Franchisor a copy of the Business Entity's formation and governing documents and a certificate of good standing from the jurisdiction under which the Business Entity was formed; (c) Developer and its Affiliates are in compliance with this Agreement and all other agreements with Franchisor or its Affiliates; (d) Developer pays
Franchisor its reasonable attorneys' fees incurred to document such transfer; and (e) Developer executes a general release in a form satisfactory to Franchisor of any and all claims against Franchisor and its Affiliates and their respective officers, directors, managers, shareholders, agents, and employees in their corporate and individual capacities, including, without limitation, claims arising under federal, state, and local laws, rules, and ordinances; provided, however, that any release will not be inconsistent with any state law regulating franchising.
Source: Item 23 — RECEIPTS (FDD pages 50–181)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, if a developer is an individual and wishes to transfer their interest to a business entity for operational convenience, they must fulfill specific requirements. First, the developer must sign Ella Cafe's form of assignment and assumption agreement. The business entity must be formed solely for developing and/or operating coffee houses.
To complete the transfer, the developer must provide Ella Cafe with a copy of the business entity's formation and governing documents, along with a certificate of good standing from the jurisdiction where the entity was formed. The developer and their affiliates must be in full compliance with the existing agreement and all other agreements with Ella Cafe or its affiliates.
Additionally, the developer is responsible for paying Ella Cafe's reasonable attorney's fees incurred to document the transfer. Finally, the developer must execute a general release, in a form satisfactory to Ella Cafe, of any and all claims against Ella Cafe and its affiliates, including their respective officers, directors, managers, shareholders, agents, and employees. This release covers claims arising under federal, state, and local laws, rules, and ordinances, but it will not be inconsistent with any state law regulating franchising.