What is the process for 1 800 Packouts to take over management of the Franchised Business?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
We or our appointee may charge you (in addition to the amounts due under this Agreement) a management fee equal to 10% of the Franchised Business' Gross Sales during the period of management, plus any direct out-of-pocket costs and expenses.
We or our appointee has a duty to utilize only reasonable efforts and will not be liable to you for any debts, losses, or obligations the Franchised Business incurs, or to any of your creditors for any products or services the Franchised Business purchases, while managing it.
You shall not take any action or fail to take any action that would interfere with our or our appointee's exclusive right to manage the Franchised Business and may, in our sole discretion, be prohibited from visiting the Franchised Business so as to not interfere with its operations.
Our (or our appointee's) management of the Franchised Business will continue for intervals lasting up to 90 days each (and, in any event, for no more than a total of one year), and we will during each interval periodically evaluate whether you are capable of resuming the Franchised Business' operation and periodically discuss the Franchised Business' status with you.
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to the 2025 FDD, 1 800 Packouts, or their appointee, can manage a franchisee's business under certain circumstances. During the period of management, 1 800 Packouts may charge the franchisee a management fee equal to 10% of the Franchised Business' Gross Sales, in addition to any amounts due under the Franchise Agreement, plus any direct out-of-pocket costs and expenses.
During the period that 1 800 Packouts or their appointee manages the business, they have a duty to utilize only reasonable efforts. 1 800 Packouts will not be liable to the franchisee for any debts, losses, or obligations the Franchised Business incurs, or to any of the franchisee's creditors for any products or services the Franchised Business purchases, while managing it.
The franchisee must not interfere with 1 800 Packouts' or their appointee's exclusive right to manage the Franchised Business, and may be prohibited from visiting the Franchised Business so as to not interfere with its operations, at 1 800 Packouts' sole discretion. This management will continue for intervals lasting up to 90 days each, but for no more than a total of one year. During each interval, 1 800 Packouts will periodically evaluate whether the franchisee is capable of resuming the Franchised Business' operation and periodically discuss the Franchised Business' status with the franchisee.
1 800 Packouts' exercise of their rights will not be a defense for the franchisee to their enforcement of any other provision of this Agreement or waive or release the franchisee from any of their other obligations under this Agreement, constitute an actual or constructive termination of this Agreement, or be their sole or exclusive remedy for the franchisee's default. The franchisee must continue to pay all fees and otherwise comply with all of their obligations under this Agreement following 1 800 Packouts' exercise of any of these rights. 1 800 Packouts may thereafter terminate the Franchise Agreement without providing the franchisee any additional corrective or cure period, unless the default giving rise to their right to terminate this Agreement has been cured to their reasonable satisfaction.