If the 1 800 Packouts franchisee is an Entity, what are the requirements for the appointed Operating Principal?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
If you are an Entity, you must appoint an Operating Principal who must have authority over all business decisions related to your Franchised Business, must have the power to bind you in all dealings with us, and must be directly involved in the daily operations of the Franchised Business. The Operating Principal must be disclosed when you sign the Franchise Agreement. If the Operating Principal changes you will be required to inform us in writing of the change. In addition, you may appoint a Manager to supervise the operation of the Franchised Business. Your Manager, who will be your on-site supervisor, is not required to have any ownership interest in you, but must successfully complete our training, including the Orientation Training.
You, your Operating Principal, and the Manager must at all times faithfully, honestly and diligently perform all obligations under the Franchise Agreement and continuously exert your and his or her full time and best efforts to promote and enhance the Franchised Business.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISED BUSINESS (FDD page 47)
What This Means (2025 FDD)
According to 1 800 Packouts' 2025 Franchise Disclosure Document, if the franchisee is an entity such as a corporation or LLC, they must appoint an Operating Principal. This Operating Principal is required to have full authority over all business decisions related to the 1 800 Packouts franchise. They must also have the power to legally bind the franchisee entity in all dealings with the franchisor.
Furthermore, the Operating Principal must be directly involved in the daily operations of the Franchised Business. This indicates that the Operating Principal cannot be a passive investor or absentee owner, but must actively participate in managing the franchise. The FDD also recommends that the franchisee appoint a Manager who must successfully complete System/Procedure Training to supervise the operation of the Franchised Business.
The Operating Principal, along with the Manager and the franchisee themselves, are obligated to perform all duties under the Franchise Agreement faithfully, honestly, and diligently. They must continuously exert their full-time efforts to promote and enhance the 1 800 Packouts business. The Operating Principal must be disclosed when the franchisee signs the Franchise Agreement, and the franchisor must be informed in writing if the Operating Principal changes.