In the Better Blend franchise agreement, what is BBF entitled to rely on from the Principal Executive?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
- 2.4 Principal Executive. Franchisee agrees that the person designated as the "Principal Executive" on the Summary Page is the executive primarily responsible for the Business and has decision-making authority on behalf of Franchisee.
BBF is entitled to rely on any communication, decision, or act by the Principal Executive as being the communication, decision, or act of Franchisee.
The Principal Executive must have at least 30% ownership interest in Franchisee.
The Principal Executive does not have to serve as a day-to-day general manager of the Business, but the Principal Executive must devote substantial time and attention to the Business.
If the Principal Executive dies, becomes incapacitated, transfers his/her interest in Franchisee, or otherwise ceases to be the executive primarily responsible for the Business, Franchisee shall promptly designate a new Principal Executive, subject to BBF's reasonable approval.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to the 2024 Better Blend Franchise Disclosure Document, Better Blend Franchising, LLC (BBF) is entitled to rely on any communication, decision, or act by the Principal Executive as being the communication, decision, or act of the franchisee. The Principal Executive is the person designated on the Summary Page of the franchise agreement as primarily responsible for the Better Blend business and has decision-making authority on behalf of the franchisee.
This means that Better Blend can treat any statement or action taken by the Principal Executive as officially representing the franchisee's position. This is significant because it streamlines communication and decision-making processes between Better Blend and its franchisees. It establishes a clear point of contact and ensures that Better Blend can rely on the information received from that individual.
However, the Principal Executive must meet certain criteria. They must have at least a 30% ownership interest in the franchisee's business. While they don't have to be the day-to-day general manager, they must devote substantial time and attention to the business. If the Principal Executive dies, becomes incapacitated, transfers their interest, or otherwise ceases to be the executive primarily responsible, the franchisee must promptly designate a new Principal Executive, subject to Better Blend's reasonable approval. This ensures that there is always a qualified individual representing the franchisee's interests to Better Blend.