In a transfer of Marble Slab Creamery units, what voting rights does the transferring Member lose?
Marble_Slab_Creamery Franchise · 2025 FDDAnswer from 2025 FDD Document
- 9.4 Effect of Transfer. A transfer of any Units by a Member, including without limitation any involuntary transfer, shall eliminate the Member's right to vote with respect to such Units on any matter submitted to the Members, and, for voting purposes, such Units shall not be treated as outstanding unless the transferee is admitted as a substituted Member pursuant to Section 3.2. The transferee of any Units shall be entitled only to the share of net profits and losses and the right to distributions associated with such Units, but shall not be entitled to any vote with respect to such Units on any matter submitted to the Members for consent or approval without first being admitted as a substituted Member pursuant to Section 3.2.
Source: Item 23 — RECEIPT (FDD pages 101–346)
What This Means (2025 FDD)
According to the 2025 Marble Slab Creamery Franchise Disclosure Document, a Member who transfers any Units loses the right to vote on any matter submitted to the Members regarding those Units. These Units will not be considered outstanding for voting purposes unless the transferee is admitted as a substituted Member, according to Section 3.2 of the agreement.
However, the transferee of the Units is entitled to a share of net profits and losses, as well as the right to distributions associated with the units. The transferee cannot vote on matters submitted to the Members for consent or approval unless they are admitted as a substituted Member under Section 3.2.
This means that while a transferor gives up voting rights, the transferee only gains those rights if they are formally admitted as a Member. This admission requires consent, ensuring that new Members meet the standards of the existing group. For a prospective franchisee, this highlights the importance of understanding the conditions under which transferred units can regain voting rights, as it directly impacts their influence within the Marble Slab Creamery franchise system.