What level of control must the Ella Cafe District Manager have over the Developer's development activities?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
If the Principal Executive will not devote full-time efforts to the management of the business contemplated by this Agreement, then, in addition to the Principal Executive, Developer must appoint an individual to serve as its District Manager.
Developer's District Manager must have full control over Developer's development activities.
Developer's District Manager need not have an equity interest in the Business Entity, but must have completed Franchisor's initial training program and all additional training that Franchisor requires, to Franchisor's satisfaction.
Developer's District Manager must devote his or her full-time efforts to management of the development of Coffee House contemplated by this Agreement and must not engage in any other business or activity, directly or indirectly, that requires substantial management responsibility or time commitment.
If the District Manager ceases to serve in such position, Developer must designate another qualified person to serve as its District Manager within 30 days after the date the prior District Manager ceases to serve.
Any proposed replacement District Manager must
Source: Item 23 — RECEIPTS (FDD pages 50–181)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, if a Principal Executive of a Developer cannot devote full-time efforts to the management of the business, the Developer must appoint a District Manager. This District Manager is required to have full control over the Developer's development activities.
The Ella Cafe District Manager does not need to have an equity interest in the Business Entity, but they must complete Ella Cafe's initial training program and any additional training required by Ella Cafe to their satisfaction. Furthermore, the District Manager must dedicate their full-time efforts to managing the development of the Coffee House contemplated by the agreement and cannot engage in any other business or activity that demands substantial management responsibility or time commitment.
If the District Manager leaves their position, the Developer has 30 days to designate a qualified replacement. The proposed replacement District Manager must successfully complete the initial training program and any other training required by Ella Cafe before assuming the position, and this must occur no later than 90 days after the previous District Manager's departure.