Can a Capriottis Sandwich Shop franchisee operate their restaurants through Approved Affiliates?
Capriottis_Sandwich_Shop Franchise · 2025 FDDAnswer from 2025 FDD Document
We also may grant multi-unit development rights to qualified franchisees, which then may develop a specific number of CAPRIOTTI'S Restaurants (a minimum of 3) within a designated territory according to a pre-determined, mandatory development schedule. Those franchisees may open and operate their CAPRIOTTI'S Restaurants directly or through "Approved Affiliates," which are entities whose majority ownership is owned and controlled by you or your owners. Our Development Rights Agreement (Exhibit C), which we sometimes reference as "DRA," governs a franchisee's multi-unit development rights and obligations. If you sign a Development Rights Agreement, you (or your Approved Affiliate) also will sign a Franchise Agreement for your first CAPRIOTTI'S Restaurant at the same time.
The form of Franchise Agreement that you and your Approved Affiliates sign for future CAPRIOTTI'S Restaurant franchises to be developed under the DRA may differ substantially and materially year to year from the first Franchise Agreement you sign for your first CAPRIOTTI'S Restaurant
to be developed (as noted above, our current version of Franchise Agreement is disclosed in this Disclosure Document as Exhibit B).
Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS, AND AFFILIATES (FDD pages 7–10)
What This Means (2025 FDD)
According to Capriottis Sandwich Shop's 2025 Franchise Disclosure Document, franchisees who obtain multi-unit development rights may be able to operate their restaurants through Approved Affiliates. These Approved Affiliates must be entities where the majority ownership is owned and controlled by the franchisee or the franchisee's owners. This option is available to franchisees who sign a Development Rights Agreement (DRA) with Capriottis Sandwich Shop.
If a franchisee enters into a Development Rights Agreement, both the franchisee (or their Approved Affiliate) will sign a Franchise Agreement for the first Capriottis Sandwich Shop restaurant at the same time. This indicates that the Approved Affiliate is subject to the same franchise terms and obligations as the original franchisee. The FDD also states that the Franchise Agreement signed by the franchisee and their Approved Affiliates for future Capriottis Sandwich Shop franchises developed under the DRA may differ substantially from the initial Franchise Agreement.
This arrangement allows for flexibility in how a franchisee structures their business when expanding with multiple units. However, prospective franchisees should carefully review the Development Rights Agreement and the Franchise Agreement to understand the specific obligations and any potential differences in terms for subsequent franchise agreements signed under the DRA. It is important to note that the franchisor retains control over who can operate a Capriottis Sandwich Shop restaurant, even under a multi-unit development agreement, by requiring majority ownership and control by the franchisee or their owners within the Approved Affiliate entity.