Under the Bb.Q Chicken Franchise Agreement, what parties are characterized as Franchisee's Principals?
Bb_Q_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
ment**
We offer the right to establish and operate a Restaurant or Food Truck under the terms of a single unit franchise agreement (the "Franchise Agreement") within a specific territory. Our current form of Franchise Agreement is Exhibit B to this Disclosure Document. You may be an individual, corporation, partnership or other form of legal entity. Under the Franchise Agreement, certain parties are characterized as Franchisee's Principals (referred to in this Disclosure Document as "your Principals"). The Franchise Agreement is signed by us, by you, and by your Principals. By signing the Franchise Agreement, your Principals agree to be individually bound by certain obligations in the Franchise Agreement, including covenants concerning confidentiality and non-competition, and to personally guarantee your performance under the Franchise Agreement. Depending on the type of business activities in which you or your Principals may be involved, we may require your Principals to sign additional confidentiality and non-competition agreements.
You must designate a general manager who will be the main individual responsible for your business (the "General Manager"). We recommend, but do not require, that you be the General Manager. Your General Manager does not have to own an equity interest in you or the franchise. The General Manager must sign covenants to maintain the confidentiality of information he/she learns while employed as your General Manager, and your General Manager must sign non-competition covenants.
Source: Item 1 — THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 10–13)
What This Means (2025 FDD)
According to Bb.Q Chicken's 2025 Franchise Disclosure Document, the Franchise Agreement identifies certain parties as "Franchisee's Principals." These Principals, along with the franchisee, are required to sign the Franchise Agreement. By signing, the Principals agree to be individually bound by specific obligations outlined in the agreement. These obligations include maintaining confidentiality and adhering to non-competition covenants. Additionally, the Principals personally guarantee the franchisee's performance under the Franchise Agreement. Bb.Q Chicken may also require these Principals to sign additional confidentiality and non-competition agreements, depending on their other business activities.
Bb.Q Chicken also requires the franchisee to designate an operating principal who will serve as the primary contact for the Franchised Business. This operating principal must work full-time in the Franchised Business and will be responsible for making decisions affecting the business. While a general manager must be designated, they are not required to have an equity interest in the franchise.
This requirement ensures that Bb.Q Chicken has individuals who are personally invested in upholding the standards and obligations of the franchise. It also provides Bb.Q Chicken with recourse against individuals, not just the business entity, in case of breaches of contract or other issues. Prospective franchisees should carefully consider who they designate as Principals, as these individuals will bear significant personal responsibility for the franchise's success and compliance.