What is required if a Management Recruiters Franchisee intends to amend or change its ownership?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
the ownership interests in Franchisee are accurately and completely described on Schedule 2 of this Agreement and, if Franchisee intends to amend or change such ownership, it will inform Franchisor at least thirty (30) days prior to such proposed change;
if Franchisee is a corporation, Franchisee does now and shall at all times in the future maintain stop-transfer instructions against the transfer on its records of any of its equity securities.
Each stock certificate must conspicuously state, in a form satisfactory to MRI, that it is held subject to all restrictions on assignments imposed by this Agreement; provided, however, that the requirements of this Section do not apply to the transfer of equity securities of a publicly held corporation.
For purposes of this Agreement, a publicly held corporation is a corporation registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, or a corporation subject to the requirements of Section 15(d) of such Act.
If Franchisee is a partnership or limited liability company, its written partnership or limited liability company operating agreement does now and shall at all points in the future provide that ownership of an interest in such entity is held subject to all restrictions on assignments imposed by this Agreement;
Source: Item 23 — RECEIPTS (FDD pages 67–327)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, if a franchisee intends to amend or change the ownership of their franchise, they must inform Management Recruiters at least thirty days prior to the proposed change.
Additionally, if the franchisee is a corporation, they must maintain stop-transfer instructions against the transfer on its records of any of its equity securities. Each stock certificate must conspicuously state, in a form satisfactory to Management Recruiters, that it is held subject to all restrictions on assignments imposed by the Franchise Agreement. However, these requirements do not apply to the transfer of equity securities of a publicly held corporation, defined as one registered under Section 12 of the Securities Exchange Act of 1934 or subject to Section 15(d) of that Act.
If the franchisee is a partnership or limited liability company, its written partnership or limited liability company operating agreement must state that ownership of an interest in such entity is held subject to all restrictions on assignments imposed by the Franchise Agreement. These stipulations ensure that Management Recruiters maintains control over the ownership and management of its franchises, safeguarding the brand and the network's integrity.