Under what conditions can a Mr. Sandless franchisee operate the business through a Designated Manager instead of personal supervision?

• 21.6.1 The corporation or limited liability company must be newly organized and its activities confined to acting exclusively as a Mr. Sandless franchisee;

• 21.6.2 You are, and at all times remain, the owner of at least fifty-one percent (51%) of the outstanding shares of the corporation or a controlling interest in the limited liability company;

• 21.6.3 The corporation or limited liability company agrees in writing to assume all of your obligations hereunder;

• 21.6.4 All shareholders of the corporation, or all members and managers of the limited liability company, must sign our Guaranty Agreement, personally agreeing to be bound by the terms of this Agreement, and guaranteeing performance of all of the franchisee's obligations under this Agreement;

• 21.6.5 Each stock certificate must be conspicuously endorsed upon its face with a statement in form satisfactory to us that it is held subject to, and that further assignment or transfer is subject to, all restrictions imposed upon assignment by this Agreement. In addition, a corporate franchisee's shareholders' agreement, if any, or a limited liability company's operating agreement, as applicable, must restrict transfer of interests to third parties;

• 21.6.6 The articles of incorporation and bylaws of the corporation, or the operating agreement or other governing document of the limited liability company, shall reflect this Agreement and all other agreements we specify, and the transferee must submit to us such documents relating to the corporation or limited liability company as we may require;

  • 21.6.7 No shares may be issued or transferred without our written consent;

• 21.6.8 No changes to the corporation or limited liability company's governing documents may be made without our express written consent;

• 21.6.9 No shares may be pledged as collateral for any corporate or limited liability company obligations without our express written consent;

• 21.6.10 Corporate or limited liability company books and records, including minutes of meetings, must be furnished to us upon request; and

• 21.6.11 The corporation or limited liability company, as applicable, must adhere to the requirements set forth in this Agreement relating to management of the Business.

A transfer pursuant to this Section 21.6 may occur one (1) time only.

Source: Item 22 — CONTRACTS (FDD page 42)