What level of time and attention must the Principal Executive devote to the Chocolate Fish Coffee business?
Chocolate_Fish_Coffee 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 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, the Principal Executive must devote substantial time and attention to the business. The Principal Executive is the person designated on the Summary Page of the Franchise Agreement who is primarily responsible for the Chocolate Fish Coffee business and has decision-making authority on behalf of the franchisee.
While the Principal Executive does not have to serve as the day-to-day general manager, they must maintain at least a 10% ownership interest in the Chocolate Fish Coffee franchise. If the 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 Fish Coffee's approval.
This requirement ensures that someone with a vested interest and decision-making power is actively involved in the Chocolate Fish Coffee business, even if they are not managing the daily operations. This structure allows for flexibility in management while maintaining accountability and oversight from a principal executive.