Is an Operating Manager of a C3 Wellness Spa franchise required to own equity interest in the franchise?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
The Franchise Agreement requires that you or, if you are a Corporate Entity, that your managing shareholder, member or partner be personally responsible for the management and overall supervision of your Spa Location Franchise (the "Managing Owner"). We must approve your Managing Owner. Your Managing Owner must have satisfactorily completed our initial training and must have obtained all required licenses and permits necessary to operate the Franchised Business. At all times, your Spa Location Franchise must be managed and supervised on-site by a Managing Owner. If you own and operate multiple Spa Location Franchises then each Spa Location Franchise may be managed and supervised on-site by an operating manager if: (a) meets all of our minimum standards and criteria for managers; (b) completes our initial training program; and (c) signs a confidentiality agreement approved by us (an "Operating Manager"). We do not require that your Operating Manager own any equity interest in the franchise. At all times, your Spa Location Franchise must be managed and supervised on-site by either a Managing Owner or Operating Manager. If you own and operate multiple Spa Location Franchises then each Spa Location Franchise must be managed and supervised on-site by an Operating Manager.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 42)
What This Means (2024 FDD)
According to the 2024 C3 Wellness Spa Franchise Disclosure Document, an Operating Manager is not required to have equity interest in the franchise. The Franchise Agreement stipulates that the franchisee, or a managing shareholder, member, or partner if the franchisee is a corporate entity, must be personally responsible for the management and supervision of the Spa Location Franchise. This individual is referred to as the "Managing Owner" and must be approved by C3 Wellness Spa, complete initial training, and obtain necessary licenses and permits.
However, if a franchisee owns and operates multiple C3 Wellness Spa locations, each location can be managed by an Operating Manager who meets certain criteria. These criteria include meeting C3 Wellness Spa's minimum standards for managers, completing the initial training program, and signing a confidentiality agreement.
C3 Wellness Spa explicitly states that it does not require the Operating Manager to own any equity interest in the franchise. This provides flexibility for franchisees who own multiple locations and choose to delegate on-site management to qualified managers without offering them ownership in the business. The FDD specifies that either a Managing Owner or an Operating Manager must supervise each Spa Location Franchise on-site at all times.