What statement must be endorsed on the stock certificates of the Controlled Entity for a Monicals Pizza franchise?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
"Franchise Operating Entity" means either (a) the entity, if any, (i) listed in the introductory paragraph, the entire legal and beneficial ownership of which shall at all times be held only by individuals meeting the definition of Franchisee and listed on Exhibit 4 to this Franchise Agreement, (ii) the charter for which provides that its activities are confined exclusively to the operation of the Franchised Restaurant, and (iii) each stock certificate or other ownership interest certificate for which has conspicuously endorsed upon the face thereof a statement in a form satisfactory to Franchisor that it is held subject to, and that further assignment or transfer thereof is subject to, all restrictions imposed upon transfers and assignments by this Agreement; or (b) a Controlled Entity as defined in Section 18.3 below;
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to the 2025 Monicals Pizza Franchise Disclosure Document, if a franchisee operates as a Franchise Operating Entity, specifically a Controlled Entity, the stock certificates or other ownership interest certificates must have a statement conspicuously endorsed on the face. This statement must be in a form satisfactory to Monicals Pizza, indicating that the certificate is held subject to, and that further assignment or transfer is subject to, all restrictions imposed upon transfers and assignments by the Franchise Agreement.
This requirement ensures that Monicals Pizza maintains control over who becomes a franchisee and that any transfer of ownership complies with the terms outlined in the Franchise Agreement. This protects the brand's integrity and consistency by preventing unauthorized or unqualified individuals from taking over a franchise location.
For a prospective Monicals Pizza franchisee, this means that if they choose to operate their franchise through a corporation or other entity, they must ensure that the stock certificates of that entity include the specified endorsement. This is a critical step in complying with the franchise agreement and maintaining a good relationship with Monicals Pizza. Failure to properly endorse the certificates could potentially lead to breaches of the agreement and possible legal ramifications.