For a Chocolate Bash franchise, is there a limit on who a franchisee can hire as an on-premises supervisor?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
hment 1 changes (which is not a Transfer), Franchisee shall notify CB Franchising within 10 days.
- 2.4 Principal Executive. Franchisee agrees that the person designated as the "Principal Executive" on the Summary Page is the executive primarily responsible for the Business and has decision-making authority on behalf of Franchisee. The Principal Executive must have at least 10% ownership interest in Franchisee. The Principal Executive does not have to serve as a day-today general manager of the Business, but the Principal Executive must devote substantial time and attention to the Business. If the Principal Executive dies, becomes incapacitated, transfers his/her interest in Franchisee, or otherwise ceases to be the executive primarily responsible for the Business, Franchisee shall promptly designate a new Principal Executive, subject to CB Franchising's reasonable approval.
- 2.5 Guaranty. If Franchisee is an entity, then Franchisee shall have each Owner sign a personal guaranty of Franchisee's obligations to CB Franchising, in the form of Attachment 3.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 29–30)
What This Means (2024 FDD)
According to the 2024 Chocolate Bash Franchise Disclosure Document, while there isn't a direct restriction on who a franchisee can hire as an on-premises supervisor, there are stipulations regarding who can be the "Principal Executive" of the franchise. The Principal Executive must have at least a 10% ownership interest in the Chocolate Bash franchise. This person is considered the executive primarily responsible for the business and must have decision-making authority.
Although the Principal Executive doesn't have to be the day-to-day general manager, they must devote substantial time and attention to the Chocolate Bash business. If the initially designated Principal Executive dies, becomes incapacitated, transfers their interest, or otherwise ceases to be the executive primarily responsible, the franchisee must promptly designate a new Principal Executive, subject to Chocolate Bash's approval.
Furthermore, Chocolate Bash requires that franchisees cannot engage a third-party management company to manage or operate the business without prior written approval from Chocolate Bash Franchising, which will not be unreasonably withheld. This implies that while a franchisee has some autonomy in staffing, Chocolate Bash maintains control over key management roles and operational oversight to protect brand standards and consistency.