Is the Key Person for a Benjamin Franklin Plumbing franchise required to be an owner of the franchised business?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
nsation. We will have the right to use, disclose, and/or license the Improvement for use by others.
ITEM 15 OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS
You must designate an individual who will be responsible for the day-to-day operational performance of the Franchised Business and who has the authority to bind the Franchisee in all decisions regarding the Franchised Business (the "Key Person"). The Key Person (a) need not be an Owner of the Franchised Business, (b) must successfully complete our Training Program described in Item 11, and (c) must work on premises at your business office.
We have the right to rely on any statement, agreement, or representation made by the Key Person on your behalf. The Key Person must certify your financial statements as correct and complete to the best of the Key Person's knowledge. If the Key Person leaves your organization, you must nominate a replacement within 30 days, and if you have not obtained our approval of a replacement within 90 days, you will be in material default of the Franchise Agreement.
If the Franchisee is or will be a business entity, all of its Owners (whether or not they are involved in the operation of the Franchised Business) who own five percent or greater interest in the business entity must sign the Personal Guarantee attached to the Franchise Agreement, making each Owner individually liable for all obligations under the Franchise Agreement. If any of your Owners is also a business entity instead of an individual, we have the right to require that the Personal Guarantee be executed by individuals and any other business entities that have direct or indirect ownership in the Franchisee.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 66)
What This Means (2025 FDD)
According to Benjamin Franklin Plumbing's 2025 Franchise Disclosure Document, the Key Person, who is responsible for the day-to-day operational performance and has the authority to make decisions for the franchise, does not need to be an owner of the franchised business. However, the Key Person must successfully complete the training program and work on the premises at the business office. Benjamin Franklin Plumbing retains the right to rely on any statement, agreement, or representation made by the Key Person on behalf of the franchisee.
If the Key Person leaves the organization, the franchisee must nominate a replacement within 30 days. If Benjamin Franklin Plumbing does not approve the replacement within 90 days, the franchisee will be in material default of the Franchise Agreement. This highlights the importance of having a qualified and approved Key Person in place to manage the daily operations of the Benjamin Franklin Plumbing franchise.
If the franchisee is a business entity, all owners with a five percent or greater interest in the business must sign a Personal Guarantee, making them individually liable for all obligations under the Franchise Agreement. This requirement ensures that individuals with significant ownership have a vested interest in the success and compliance of the franchise. Some local regulations may require the owner of a plumbing services company to have applicable licenses, so prospective franchisees should check local licensing requirements.