What is the definition of 'Principal Executive' for a Bombs Away franchise?
Bombs_Away 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.
The Principal Executive must have at least 10% ownership interest in Franchisee.
The Principal Executive must participate in the direct operation of the Business and 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 Bombs Away Franchising's reasonable approval.
Source: Item 15 — Obligation to Participate in the Actual Operation of the Franchise Business (FDD pages 26–27)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, the Principal Executive is the person designated on the Summary Page as primarily responsible for the Bombs Away business, possessing the authority to make decisions on behalf of the franchisee. This individual is a key figure in the franchise operation, and Bombs Away Franchising places specific requirements on who can hold this role.
To qualify as a Principal Executive, the designated person must have at least a 10% ownership interest in the Bombs Away franchise. Furthermore, they are required to actively participate in the direct operation of the business, dedicating a substantial amount of their time and attention to it. This ensures that the individual in charge is not only invested financially but also actively involved in the day-to-day management and growth of the franchise.
Bombs Away Franchising also stipulates that if the Principal Executive dies, becomes incapacitated, transfers their interest in the franchise, or otherwise ceases to be the executive primarily responsible for the business, the franchisee must promptly designate a new Principal Executive. This new appointment is subject to Bombs Away Franchising's reasonable approval, ensuring that the replacement meets the necessary qualifications and is suitable for the role. This requirement helps maintain continuity and operational standards within the Bombs Away franchise system.