Is a Bombs Away franchisee required to participate personally in the direct operation of their business?
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 franchisee is required to designate a "Principal Executive" who is primarily responsible for the business. This Principal Executive must have at least a 10% ownership interest in the Bombs Away franchise.
The Principal Executive is not just a figurehead; they must actively participate in the direct operation of the Bombs Away business. Furthermore, they are required to devote substantial time and attention to the business, indicating a significant commitment is expected.
If the designated 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. This new executive is subject to Bombs Away's approval, ensuring that the replacement meets the franchisor's standards for leadership and involvement in the franchise.