If a 1 800 Packouts franchisee is an entity, what agreement must each owner execute?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
If you are a corporation, limited liability company, partnership, or other entity (collectively, an "Entity"), all of your owners of a legal and/or beneficial interest in the Entity (the "Owners") are listed on Appendix B.
If you are an Entity, the individual Owner who you must appoint to have authority over all business decisions related to your business and to have the power to bind you in all dealings with us will be referred to as your "Operating Principal." The term "Manager" shall mean the person referred to in Section F (Management of the Franchised Business) of this Agreement.
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to the 2025 1 800 Packouts FDD, if a franchisee is a corporation, limited liability company, partnership, or other entity, each owner with a legal or beneficial interest in the entity must be listed on Appendix B of the franchise agreement.
Furthermore, if the franchisee is an entity, they must appoint an individual owner as the Operating Principal. This Operating Principal will have the authority over all business decisions related to the franchise and the power to bind the entity in all dealings with 1 800 Packouts. The FDD also mentions a 'Manager,' referring to the person described in the Management of the Franchised Business section of the agreement.
While the FDD specifies that owners must be listed on Appendix B and an Operating Principal must be appointed, it does not explicitly state that each owner must execute a specific agreement. It is common in franchising for all owners of an entity franchisee to sign a personal guarantee, which would make them personally liable for the entity's obligations under the franchise agreement. A prospective franchisee should confirm with 1 800 Packouts whether a personal guarantee or other agreement is required from each owner.