Does Crisp & Green expect individuals or business entities to sign the Franchise Agreement?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS
We expect only business entities, and not individuals, to sign the Franchise Agreement. Each entity must designate an Operating Partner who must meet with our approval. The Operating Partner must maintain a substantial (generally at least 5%, although we will make case-by-case determinations in our discretion) direct or indirect ownership interest in you, be the General Manager of your Franchised Restaurant or (with our prior approval) designate another person meeting with our approval to be the General Manager of your Franchised Restaurant. If you will develop multiple Franchised Restaurants pursuant to an Area Development Agreement, your Operating Partner will be your Approved Operator unless (with our prior approval) you designate another person meeting with our approval to be your Approved Operator. Your Operating Partner must participate in and complete Crisp Academy, and must have the authority to make decisions on your behalf and bind you with respect to matters and agreements between you and us.
Your Franchised Restaurant must be managed and supervised by a General Manager, who will be your Operating Partner unless we have agreed otherwise with your Operating Partner. If you operate multiple Franchised Restaurants pursuant to an Area Development Agreement, you must designate a General Manager that meets our approval for each Franchised Restaurant. Your General Manager will be responsible for all day-to-day operations of your Franchised Restaurant and must be your employee subject to your supervision and direction. Your General Manager must exert his or her full time best-efforts to the development and operation of your Franchised Restaurant and must attend and complete Crisp Academy and all other training programs that we require from time to time. The General Manager must have the authority to make all day-to-day operational decisions affecting your Franchised Restaurant, and may not engage in any other business activity, directly or indirectly, that requires substantial management responsibility or time commitments or that otherwise interferes with his or her role as your General Manager.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 50–51)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, the company expects only business entities, not individuals, to sign the Franchise Agreement. Each entity is required to designate an Operating Partner, who must be approved by Crisp & Green. This Operating Partner must generally maintain at least a 5% direct or indirect ownership interest in the franchisee entity, although Crisp & Green may make case-by-case determinations at their discretion. The Operating Partner is also expected to be the General Manager of the franchised restaurant, or designate another approved person to fulfill that role with Crisp & Green's prior approval.
If a franchisee plans to develop multiple Crisp & Green restaurants under an Area Development Agreement, the Operating Partner will serve as the Approved Operator, unless Crisp & Green approves another person. The Operating Partner or Approved Operator must participate in and complete Crisp Academy and have the authority to make decisions and bind the franchisee entity in agreements with Crisp & Green.
Furthermore, if the franchisee is a business entity, each Principal Owner and their spouses must guarantee the franchisee's obligations under the Franchise Agreement by executing an Owners' Personal Guaranty of Franchisee's Obligations. A Principal Owner is generally defined as someone holding 10% or more of the legal, beneficial ownership, or voting interest in the franchisee entity or any entity influencing the franchisee's management decisions. Crisp & Green may also designate individuals as Principal Owners based on their financial or managerial qualifications, even if they don't meet the standard ownership criteria. These Principal Owners and their spouses are subject to direct obligations under the Franchise Agreement, including non-compete obligations, in addition to guaranteeing the franchisee's obligations.