What authority must the Managing Owner of a Golden Krust Caribbean Restaurant franchise have?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
If you are at any time a corporation, limited liability company or partnership, you agree and represent that:
- (1) You will have the authority to execute, deliver and perform your obligations under this Agreement and are duly organized or formed and validly existing in good standing under the laws of the state of your incorporation or formation;
- (2) Your organizational documents or partnership agreement will recite that the issuance and transfer of any ownership interests in you are restricted by the terms of this Agreement, and all certificates and other documents representing ownership interests in you will bear a legend referring to the restrictions of this Agreement;
- (3) Exhibit A to this Agreement will completely and accurately describe all of your owners and their interests in you; and
- (4) Each of your owners at any time during the term of this Agreement will execute an agreement in the form that we prescribe undertaking to be bound jointly and severally by all provisions of this Agreement and any ancillary agreements between you and us that bind you. You and your owners agree to execute and deliver to us such revised Exhibits A as may be necessary to reflect any changes in the information contained therein and to furnish such other information about your organization or formation as we may request. Your owners and each of their spouses, if applicable, shall jointly and severally personally guarantee your payment and performance under this Agreement and personally bind themselves to the terms of this Agreement pursuant to the attached Guaranty and Assumption of Obligations (Exhibit C to this Agreement).
Source: Item 22 — CONTRACTS (FDD page 35)
What This Means (2024 FDD)
According to the 2024 Golden Krust Caribbean Restaurant Franchise Disclosure Document, if the franchisee is a corporation, limited liability company, or partnership, they must have the authority to execute, deliver, and perform their obligations under the Franchise Agreement. This means the franchisee entity must be properly organized and in good standing under the laws of its state. The organizational documents must also state that ownership interests are restricted by the terms of the Franchise Agreement, and ownership documents must reference these restrictions.
Furthermore, Exhibit A of the Franchise Agreement must accurately describe all owners and their interests in the company. Each owner must agree to be bound jointly and severally by the Franchise Agreement and any related agreements. They must also provide revised Exhibits A to reflect any changes in ownership and furnish any other requested information about the organization. The owners and their spouses, if applicable, must personally guarantee the franchisee's payment and performance under the agreement.
In the event of death or disability of the owner of a controlling interest, their representative must transfer the interest in the agreement within six months, subject to all transfer conditions. A failure to transfer within this period constitutes a breach of the agreement. Additionally, neither the franchisee nor any of their owners can have a controlling interest in or perform services for a Competitive Business during the term of the agreement. This ensures the franchisee's commitment to the Golden Krust Caribbean Restaurant system and prevents conflicts of interest.