For a Card My Yard franchise, what is the role of the 'Principal Owner' and what are the requirements for this role?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
When you sign the Franchise Agreement, you must designate an individual to serve as your "Principal Owner." The Principal Owner must be an individual holding an ownership interest in you, or, if you are an individual you will be the Principal Owner. The Principal Owner must meet our qualifications and must be approved by us. The same person must act as the Principal Owner under the Franchise Agreements for all Card My Yard businesses operated by you and, if applicable, your affiliates.
Unless a separate General Manager is approved by us, your Principal Owner must devote his or her full time and best efforts to the supervision of your operations under the Franchise Agreement. If you wish to appoint a General Manager, that person must devote his or her full time best efforts to the supervision of your operations under the Franchise Agreement, must successfully complete our required training program and must be approved by us in writing. Your General Manger or other on-premises supervisor is not required to hold an equity ownership interest in the Card My Yard business. Without our written consent, your Principal Owner may not engage in any business other than the development and operation of your Card My Yard business(es). Your Principal Owner must satisfy our training requirements and our other standards, and each person holding an ownership interest in the franchise must personally guaranty your performance under the Franchise Agreement. The personal guaranty agreement will be in substantially the form of Exhibit A to the Franchise Agreement. Your Principal Owner and any other owners will be individually, jointly and severally bound by all of your obligations and the obligations of the Principal Owner under the Franchise Agreement. If you are an individual, your spouse must also personally guaranty your performance under the Franchise Agreement.
Before the Card My Yard business opens for business, you must designate an individual who meets our qualifications to serve as the Card My Yard business' General Manager and supervise the operation of your Card My Yard business. Your Principal Owner may serve as the General Manager of your Card My Yard business, but he or she may not serve as the General Manager for more than one Card My Yard business at the same time. With our written consent, you may elect to designate an individual other than your Principal Owner as General Manager. Even if we permit you to designate a General Manager to supervise your operations under the Franchise Agreement, your Principal Owner remains ultimately responsible for the General Manager's performance. The General Manager must devote his or her full time and best efforts to the supervision of your operations under the Franchise Agreement and may not engage in any other business. Each Card My Yard business must have a different General Manager.
You must notify us promptly if your Principal Owner or any General Manager cannot continue or no longer qualifies to serve as a Principal Owner or General Manager, as applicable. You will have 30 days from the date of the notice (or from any date that we independently determine the Principal Owner or General Manager no longer meets our standards) to take corrective action acceptable to us. During that 30-day period, you must provide for interim management of your operations in compliance with the Franchise Agreement.
At our request, you must have your General Manager and any other personnel who will have access to our training, sign covenants not to compete, and such persons must maintain the confidentiality of information they have access to through their relationship with you. These covenants will be in substantially the form of Exhibit B
to the Franchise Agreement. We have the right, in our sole discretion, to decrease the period of time or geographic scope of the non-competition covenants or eliminate the non-competition covenant altogether for any person who must sign an agreement described in this paragraph.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 49–50)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, the Principal Owner is a key figure in the franchise operation. When signing the Franchise Agreement, franchisees must designate an individual to serve as their Principal Owner. If the franchisee is an individual, they will be the Principal Owner. The Principal Owner must meet Card My Yard's qualifications and receive approval from them. If a franchisee operates multiple Card My Yard businesses, the same person must act as the Principal Owner for all locations.
Unless Card My Yard approves a separate General Manager, the Principal Owner must dedicate their full time and best efforts to supervising the franchise's operations. Without written consent from Card My Yard, the Principal Owner cannot engage in any other business besides developing and operating their Card My Yard business. The Principal Owner must also satisfy Card My Yard's training requirements and other standards. Each person holding an ownership interest in the franchise must personally guarantee the franchisee's performance under the Franchise Agreement, and if the franchisee is an individual, their spouse must also provide a personal guarantee.
Before the Card My Yard business opens, the franchisee must designate an individual who meets Card My Yard's qualifications to serve as the General Manager and supervise the business's operation. The Principal Owner can serve as the General Manager, but not for more than one Card My Yard business simultaneously. With written consent, the franchisee can designate someone other than the Principal Owner as General Manager. However, even with a General Manager in place, the Principal Owner remains ultimately responsible for the General Manager's performance. The General Manager must also devote their full time and best efforts to supervising the operations and cannot engage in any other business. Each Card My Yard business must have a different General Manager.
Franchisees must promptly notify Card My Yard if the Principal Owner or General Manager can no longer continue or no longer qualifies for their role. They have 30 days to take corrective action acceptable to Card My Yard. During this period, they must provide interim management that complies with the Franchise Agreement. At Card My Yard's request, the General Manager and any other personnel with access to training must sign covenants not to compete and maintain the confidentiality of information they access through their relationship with the franchise.