Can Mr. Sandless require a particular individual to serve as the limited liability company's manager?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition, we must approve all shareholders of a corporation transferee, or all members and managers of a limited liability company transferee.
We may require that a particular individual remain the owner of at least fifty-one percent (51%) of the outstanding stock of a franchisee corporation, or retain an interest of at least fifty-one percent (51%) in the limited liability company, as applicable, and serve as the corporation's chief executive officer or the limited liability company's manager;
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, when transferring a franchise, Mr. Sandless has specific requirements regarding the ownership and management of the buying entity, especially if it's a corporation or limited liability company. Mr. Sandless must approve all shareholders of a corporation transferee, or all members and managers of a limited liability company transferee.
Specifically, Mr. Sandless retains the right to mandate that a particular individual maintain at least 51% ownership in the limited liability company. Furthermore, Mr. Sandless can require that this individual serve as the limited liability company's manager.
This condition ensures that Mr. Sandless maintains a degree of control over the franchise operation even after a transfer. It allows them to ensure that someone with a significant stake in the company and approved by them is actively managing the business. For a prospective buyer, this means they need to be prepared for Mr. Sandless to potentially dictate who will manage the company if they choose to purchase a franchise through a corporate entity or LLC.