Is a Chocolate Bash franchisee required to participate personally in the direct operation of their business?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
SINESS**
Your Participation
You are not required to participate personally in the direct operation of your business. However, we recommend that you participate.
You must designate one person as your "Principal Executive". The Principal Executive is the executive primarily responsible for your business and has decision-making authority on behalf of the business. The Principal Executive must own at least 10% of the business. The Principal Executive must complete our initial training program. The Principal Executive must complete any post-opening training programs that we develop in the future. The Principal Executive must make reasonable efforts to attend all in-person meetings and remote meetings (such as telephone conference calls), including regional or national brand conferences, that we require. The Principal Executive cannot fail to attend more than three consecutive required meetings.
If your business is owned by an entity, all owners of the business must sign our Guaranty and Non-Compete Agreement (see Attachment 3 to Exhibit B).
"On-Premises" Supervision
You are not required to personally conduct "on-premises" supervision (that is, act as general manager) of your business. However, we recommend on-premises supervision by you.
There is no limit on who you can hire as an on-premises supervisor. The general manager of your business (whether that is you or a hired person) must successfully complete our training program.
If the franchise business is owned by an entity, we do not require that the general manager own any equity in the entity.
Restrictions on Your Manager
If we request, you must have your general manager sign a confidentiality and non-compete agreement. We do not require you place any other restrictions on your manager.
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 Chocolate Bash's 2024 Franchise Disclosure Document, franchisees are not required to participate personally in the direct operation of their business. However, Chocolate Bash recommends that franchisees do participate. While franchisees are not required to conduct on-premises supervision, which means acting as a general manager, Chocolate Bash also recommends this.
Chocolate Bash requires the franchisee to designate a "Principal Executive" who is primarily responsible for the business and has decision-making authority. This Principal Executive must own at least 10% of the business and must complete Chocolate Bash's initial training program, as well as any future post-opening training programs. The Principal Executive should also make reasonable efforts to attend all in-person and remote meetings, including regional or national brand conferences, and cannot miss more than three consecutive required meetings.
If the Chocolate Bash business is owned by an entity, all owners must sign a Guaranty and Non-Compete Agreement. The general manager, whether it is the franchisee or a hired person, must successfully complete the training program. Chocolate Bash may also require the general manager to sign a confidentiality and non-compete agreement.