What is the Chocolate Bash franchisee required to do if the Principal Executive changes?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, the franchisee must promptly designate a new Principal Executive subject to the franchisor's reasonable approval if the current Principal Executive dies, becomes incapacitated, transfers their interest, or otherwise ceases to be primarily responsible for the business.
This requirement ensures that Chocolate Bash maintains a consistent point of contact and decision-maker for each franchise location. The Principal Executive plays a crucial role in the business, requiring them to devote substantial time and attention to the Chocolate Bash business, even if they do not serve as the day-to-day general manager.
The franchisor's approval of a new Principal Executive allows them to assess whether the proposed individual has the necessary skills and commitment to manage the franchise effectively. This provision protects the Chocolate Bash brand and ensures that franchisees adhere to the franchisor's standards and operational guidelines. The Principal Executive must also have at least 10% ownership in the Chocolate Bash franchise.