What is the relationship between the Franchise Agreement and the Management Agreement for a Care Plus Medical Ucc franchise?
Care_Plus_Medical_Ucc Franchise · 2024 FDDAnswer from 2024 FDD Document
For the ownership, development, and operation of a Franchised Business under the Managed Operation Model, you must sign our standard Franchise Agreement and Managed Services Addendum to Franchise Agreement (attached to this Disclosure Document as Exhibit K). You must also enter into a management services agreement ("Management Agreement") with a Practice Entity that we approve to provide the Practice Entity and its Licensed Providers the Management Services and grant them a sublicense to use the Names and Marks at or through the Franchised Business. You, as the franchisee, will be responsible for construction and build-out of the Franchised Business for use by the Practice Entity and its Licensed Providers and ensuring that the Practice Entity and its Licensed Providers operate the Franchised Business in conformance with our System, specifications, and standards, but only the Licensed Providers are permitted to exercise professional or medical judgment and to offer medical products or services. You must hire an attorney to prepare the Management Agreement and to independently evaluate, review, and ensure that your Management Agreement complies with all applicable local, state, and federal laws. The Management Agreement must be approved by us before you open your Franchised Business, and must remain in effect for the entire term of your Franchise Agreement.
Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS, AND AFFILIATES (FDD pages 7–11)
What This Means (2024 FDD)
According to Care Plus Medical Ucc's 2024 Franchise Disclosure Document, the relationship between the Franchise Agreement and the Management Agreement is crucial under the Managed Operation Model. To operate a Care Plus Medical Ucc franchise under this model, a franchisee must sign the standard Franchise Agreement and a Managed Services Addendum. Additionally, the franchisee must enter into a separate Management Agreement with a Practice Entity approved by Care Plus Medical Ucc. This Practice Entity, comprised of Licensed Providers, will then receive Management Services and a sublicense to use Care Plus Medical Ucc's Names and Marks at the Franchised Business.
The franchisee is responsible for the construction and build-out of the Franchised Business, ensuring it meets Care Plus Medical Ucc's standards. However, only the Licensed Providers within the Practice Entity are authorized to exercise professional or medical judgment and offer medical products or services. This division of responsibilities ensures compliance with healthcare regulations, particularly in states with corporate practice of medicine doctrines.
The Management Agreement is not a mere formality; it must be approved by Care Plus Medical Ucc before the Franchised Business opens and must remain in effect for the entire term of the Franchise Agreement. Furthermore, Care Plus Medical Ucc requires the franchisee to hire an attorney to prepare the Management Agreement and to independently evaluate and ensure its compliance with all applicable local, state, and federal laws. This highlights the importance of legal counsel in navigating the complex regulatory landscape of healthcare franchising and ensuring the Management Agreement aligns with both the Franchise Agreement and relevant laws.