Can the General Manager of a Crisp & Green franchise be considered an employee or agent of the franchisor?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
8.03 Operating Partner; General Manager; Approved Operator. If you are, or at any time become, an Entity, you must designate in Exhibit A the "Operating Partner." You may not change the Operating Partner without our prior written consent.
You must designate an individual, subject to our approval, to serve as the "General Manager" for your Franchised Restaurant. If you are an Entity, unless we have agreed otherwise, your Operating Partner will be your General Manager. The General Manager shall be responsible for the daily operation of the Franchised Restaurant and may be a Principal Owner. The General Manager must be your employee subject to your direction (and consequently will never be deemed to be our employee or agent). The General Manager shall (a) exert full-time, best efforts to the development and operation of the Franchised Restaurant and all other Restaurants you own; (b) complete our training program to our satisfaction before engaging in his or her operational duties; (c) have the authority to make, and bind you to, all operational decisions regarding the Franchised Restaurant; and (d) not engage in any other business or activity, directly or indirectly, that requires substantial management responsibility or time commitments or otherwise may conflict with the General Manager's obligations hereunder.
Source: Item 23 — RECEIPTS (FDD pages 66–252)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, the General Manager of a franchised restaurant is explicitly defined as the franchisee's employee, not Crisp & Green's employee or agent. This distinction is important because it clarifies that the franchisee is responsible for managing and directing the General Manager's activities. The General Manager must exert full-time effort to develop and operate the restaurant and complete Crisp & Green's training program. They also have the authority to make operational decisions for the restaurant and cannot engage in conflicting business activities.
This arrangement means that Crisp & Green franchisees have direct control over their General Manager, but also bear the responsibility for their actions and compliance with employment laws. The franchisor maintains control by requiring the franchisee to designate a General Manager subject to their approval. This ensures that the individual meets Crisp & Green's standards for managing a franchise location.
For a prospective franchisee, this arrangement offers a degree of autonomy in managing their restaurant's daily operations. However, it also places the onus on the franchisee to properly train, supervise, and manage the General Manager to ensure the restaurant operates according to Crisp & Green's standards and policies. The franchisee must also ensure the General Manager does not engage in any activities that conflict with their obligations to the franchise.