Does the definition of 'Affiliate' for a Bath Tune Up franchisee include shareholders who do not control the franchisee?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
An "Affiliate" of Franchisor or Franchisee, as the case may be, means all people in the following categories when they are conducting business activities related to Franchisor or Franchisee: (a) all people who Control, are Controlled by, or are under common Control with, Franchisor or Franchisee, (b) all direct or indirect shareholders, partners, members, or owners of Franchisor or Franchisee, regardless whether they Control Franchisor or Franchisee, and (c) all officers, directors, employees, and agents of Franchisor or Franchisee and of Franchisor's or Franchisee's other Affiliates.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, the definition of "Affiliate" includes shareholders regardless of their level of control. Specifically, the definition encompasses all direct or indirect shareholders, partners, members, or owners of the franchisee, irrespective of whether they control the franchisee. This broad definition has implications for franchisees, as the actions and business activities of these affiliates, if related to Bath Tune Up, could potentially affect the franchise agreement.
This definition means that Bath Tune Up franchisees need to be aware of the business activities of all shareholders, as those activities could create obligations or liabilities for the franchise. For example, if a shareholder is involved in activities that could harm the Bath Tune Up brand, it could be attributed to the franchisee.
It is important for prospective franchisees to fully understand this definition and discuss with Bath Tune Up any concerns about how the actions of shareholders might impact their franchise agreement. Franchisees should also seek legal counsel to understand their obligations and liabilities related to the actions of their shareholders under the franchise agreement.