If C3 Wellness Spa appoints a manager, does this relieve the Franchisee of their obligations?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
s Agreement, approved by Franchisor in accordance with and subject to this Article 14 and the terms and conditions of this Agreement; and
- (19) Franchisor's consent to a Transfer of any interest that is subject to the restrictions of this Agreement shall not constitute a waiver of any claims it may have against Franchisee or deemed a waiver of Franchisor's right to demand strict and exact compliance with this Agreement by the transferee.
14.D. DEATH OR DISABILITY OF FRANCHISEE OR AN OWNER
(1) If Franchisee is an individual and not a Corporate Entity, upon the death or permanent disability of Franchisee, the executor, administrator, conservator or other personal representative of Franchisee, must appoint a manager that meets the equivalent of an Operating Manager within a reasonable time, which shall not exceed 30 days from the date of death or permanent disability. The appointed manager (as applicable) must serve and qualify as an Operating Manager and attend and successfully complete the Training Program within 60 days of the appointment. If Franchisee's Spa is not being managed by a Franchisor approved Operating Manager (as applicable) within 30 days after such death or permanent disability, Franchisor is authorized, but is not required, to immediately appoint a manager to maintain the operations of Franchisee's Spa for, and on behalf of, Franchisee at Franchisee's sole costs until an approved Operating Manager is able to assume the management and operation of Franchisee's Spa. Franchisor's appointment of a manager for Franchisee's Spa does not relieve Franchisee of its obligations under this Agreement, including this Article 14.D., or constitute a waiver of Franchisor's right to terminate this Agreement pursuant to
Article 16, below. At all times, including while Franchisee's Spa may be managed by Franchisor's appointed manager, Franchisor shall not be liable for any debts, losses, costs, or expenses incurred in the operations of Franchisee's Spa or to any creditor of Franchisee for any products, materials, supplies or services purchased by Franchisee's Spa.
Source: Item 23 — RECEIPTS (FDD pages 59–293)
What This Means (2024 FDD)
According to C3 Wellness Spa's 2024 Franchise Disclosure Document, the appointment of a manager by the franchisor does not relieve the franchisee of their obligations under the franchise agreement. This holds true whether the franchisee is an individual or a corporate entity. The franchisee remains responsible for fulfilling all obligations, even while the manager is in place.
Specifically, if the franchisee is an individual and becomes deceased or permanently disabled, their representative must appoint a manager approved by C3 Wellness Spa within 30 days. If they fail to do so, C3 Wellness Spa can appoint a manager at the franchisee's expense. Similarly, if the franchisee is a corporate entity and the managing owner dies or becomes permanently disabled, the remaining owners must appoint a new managing owner approved by C3 Wellness Spa within 30 days. If this doesn't happen, C3 Wellness Spa can appoint a manager at the franchisee's cost.
In either scenario, C3 Wellness Spa's appointment of a manager does not waive the franchisee's obligations or the franchisor's right to terminate the agreement. The franchisee is still responsible for debts, losses, costs, and expenses incurred during the manager's operation of the spa. C3 Wellness Spa also has the right to charge a reasonable fee for these management services and can discontinue them at any time. This means that even with a manager in place, the franchisee retains ultimate responsibility for the performance and financial obligations of the C3 Wellness Spa franchise.