What legend is required on the face of securities issued by a LLC Marble Slab Creamery franchisee?
Marble_Slab_Creamery Franchise · 2025 FDDAnswer from 2025 FDD Document
5.2 A Franchisee which is a limited liability company will comply, except as otherwise approved in writing by Franchisor, with the following requirements throughout the term of this Agreement:
5.2.1 Franchisee will furnish Franchisor with its Articles of Organization, Certificate of Formation, Operating Agreement, Limited Liability Company Agreement, other governing documents, any other documents Franchisor may reasonably request, and any amendments thereto.
5.2.2 Franchisee will confine its activities exclusively to operating the Restaurant and any other "MARBLE SLAB CREAMERY" restaurants owned and operated by Franchisee pursuant to a validly existing franchise agreement.
5.2.3 Franchisee will maintain stop transfer instructions against the transfer on its records of any Equity securities; and will issue no securities upon the face of which does not legibly and conspicuously appear a printed legend in the form reasonably prescribed by Franchisor stating that the transfer of such stock is subject to the terms and conditions of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 101)
What This Means (2025 FDD)
According to the 2025 Marble Slab Creamery Franchise Disclosure Document, a franchisee operating as a limited liability company (LLC) must adhere to specific requirements regarding the issuance of equity securities. Marble Slab Creamery requires that the franchisee maintain stop transfer instructions against the transfer of any equity securities on its records.
Furthermore, the LLC franchisee must ensure that any securities issued have a printed legend displayed legibly and conspicuously on their face. This legend must be in a form reasonably prescribed by Marble Slab Creamery. The legend should state that the transfer of such stock is subject to the terms and conditions outlined in the franchise agreement.
This requirement ensures that Marble Slab Creamery maintains control over the ownership and transfer of equity in its franchise locations, protecting the brand and the integrity of the franchise system. It is a fairly standard practice in franchising to ensure that transfers of ownership are controlled and approved by the franchisor.