Under what conditions can the Managing Owner of a C3 Wellness Spa delegate management functions?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
(2) If Franchisee is a Corporate Entity, upon the death or permanent disability of Franchisee's Managing Owner, the remaining Owners within a reasonable time, which shall not exceed 30 days from the date of death or permanent disability must appoint a new Managing Owner that is approved by Franchisor. The appointed Managing Owner must 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 Managing Owner (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 Managing Owner 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. Franchisor has the right to charge a reasonable fee for such management services and may cease to provide management services at any time.
Notwithstanding the foregoing, if Franchisee is a Corporate Entity and the Managing Owner is the only Owner of Franchisee, then Article 14.D(1) shall apply as if the Managing Owner were the sole individual Franchisee.
Source: Item 23 — RECEIPTS (FDD pages 59–293)
What This Means (2024 FDD)
According to the 2024 C3 Wellness Spa Franchise Disclosure Document, if the franchisee is a corporate entity, the remaining owners must appoint a new Managing Owner approved by C3 Wellness Spa within 30 days of the Managing Owner's death or permanent disability. The appointed Managing Owner must complete the Training Program within 60 days of appointment.
If the franchisee's spa is not managed by an approved Managing Owner within 30 days after the death or permanent disability, C3 Wellness Spa is authorized, but not required, to appoint a manager to maintain operations on behalf of the franchisee at the franchisee's expense until an approved Managing Owner can assume management. The franchisee remains responsible for their obligations under the agreement, and C3 Wellness Spa's appointment of a manager does not waive its right to terminate the agreement.
During the period when C3 Wellness Spa's appointed manager is in place, C3 Wellness Spa is not liable for any debts, losses, costs, or expenses incurred in the spa's operations or to any creditor of the franchisee. C3 Wellness Spa has the right to charge a reasonable fee for these management services and may cease providing them at any time. If the Managing Owner is the only owner of the corporate entity, these conditions apply as if the Managing Owner were the sole individual franchisee.