What is a Chocolate Fish Coffee franchisee required to disclose to the franchisor regarding the business?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
- 2.3 Franchisee Control. Franchisee represents that it will identify each owner, officer and director of Franchisee, and describes the nature and extent of each owner's interest in Franchisee.
If any of this information changes, Franchisee shall notify Franchisor 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 Chocolate Fish Franchising's reasonable approval.
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to the 2024 Chocolate Fish Coffee Franchise Disclosure Document, a franchisee must disclose specific information to the franchisor regarding ownership and executive roles within the franchise. Specifically, the franchisee must identify each owner, officer, and director of the franchise entity, detailing the nature and extent of each owner's interest. Any changes to this information must be reported to Chocolate Fish Franchising within 10 days.
Furthermore, the franchisee must designate a "Principal Executive" who is primarily responsible for the Chocolate Fish Coffee business and possesses decision-making authority. This Principal Executive must have at least a 10% ownership interest in the franchise. While the Principal Executive is not required to be the day-to-day general manager, they must devote substantial time and attention to the business.
If the designated Principal Executive dies, becomes incapacitated, transfers their interest, or otherwise ceases to be the executive primarily responsible, the franchisee is obligated to promptly designate a new Principal Executive. This new appointment is subject to Chocolate Fish Franchising's approval. These requirements ensure that Chocolate Fish Coffee maintains clear lines of communication and accountability within each franchise location, with identified individuals responsible for the business's operation and compliance with the franchise agreement.