How does the Extreme Art Studio Franchise Agreement define the term 'owner'?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
and the Franchised Business or an ownership interest in you), including, without limitation, any person who has a direct or indirect interest in you (or a transferee), this Franchise Agreement or the Franchised Business, and any person who has any other legal or equitable interest, or the power to vest in himself or herself any legal or equitable interest, in their revenue, profits, rights or assets.
- 17.14.7 References to a "controlling ownership interest" in you or one of your owners (if an Entity) mean the percent of the voting shares or other voting rights that results from dividing one hundred percent (100%) of the ownership interests by the number of owners.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, a 'controlling ownership interest' is defined in the context of transferring ownership. Specifically, it refers to the percentage of voting shares or other voting rights that results from dividing 100% of the ownership interests by the number of owners.
This definition is important when considering a transfer of ownership in the Extreme Art Studio franchise. The determination of whether a 'controlling ownership interest' is involved is assessed both immediately before and immediately after the proposed transfer. This ensures that the franchisor, Extreme Art Studio, can evaluate if the transfer results in a change of control, based on the number of owners involved.
For a prospective franchisee, this means that any transfer of ownership must be carefully evaluated to determine if it constitutes a transfer of a 'controlling ownership interest,' which could trigger certain requirements or restrictions under the Franchise Agreement. Understanding this definition is crucial for franchisees planning to sell or transfer their business in the future, as it dictates the procedures and approvals required by Extreme Art Studio.