What happens upon the death or incapacity of a Chocolate Bash franchisee?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
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 franchise agreement addresses the situation where the Principal Executive of the franchise dies or becomes incapacitated. The Principal Executive is the person designated on the Summary Page of the agreement as primarily responsible for the Chocolate Bash business, possessing decision-making authority on behalf of the franchisee. This individual must maintain at least a 10% ownership interest in the franchise.
While the Principal Executive is not required to manage the day-to-day operations, they must dedicate substantial time and attention to the business. If the Principal Executive dies, becomes incapacitated, transfers their interest, or otherwise ceases to be the executive primarily responsible, the franchisee is required to promptly designate a new Principal Executive.
This new Principal Executive is subject to Chocolate Bash's reasonable approval. This provision ensures that Chocolate Bash retains some control over who is managing the franchise, even in unforeseen circumstances such as death or incapacity, and that the business continues to be operated by a qualified individual.