Does the Face Foundrie agreement define 'Principal' in the context of Area Developers that are not individuals?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
If Area Developer is other than an individual, Area Developer shall designate, subject to Franchisor's reasonable approval, one Operating Partner (as defined in Section 9.1) who is both an individual person and owns at least a twenty percent (20%) of Area Developer, and who shall be responsible for general oversight and management of the development of the Franchised Facial Bars under this Agreement and the operations of all such Franchised Facial Bars open and in operation on behalf of Area Developer (the "Operating Partner").
Area Developer acknowledges and agrees that Franchisor shall have the right to rely upon the Operating Partner to have been given, by Area Developer, the responsibility and decision-making authority regarding the Area Developer's business and operation.
In the event the person designated as the Operating Partner dies or becomes incapacitated, leaves the employ of Area Developer, transfers his/her interest in Area Developer, or otherwise ceases to supervise the development of the Franchised Facial Bars, Area Developer shall promptly designate a new Operating Partner, subject to Franchisor's reasonable approval.
Source: Item 23 — RECEIPTS (FDD pages 74–257)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, when an Area Developer is not an individual, the agreement requires the designation of an 'Operating Partner.' This Operating Partner must be an individual who owns at least 20% of the Area Developer entity. The Operating Partner is responsible for the general oversight and management of the development and operations of the Face Foundrie Facial Bars under the Area Development Agreement. Face Foundrie retains the right to reasonably approve the designated Operating Partner.
Face Foundrie emphasizes that it will rely on the Operating Partner to have the necessary responsibility and decision-making authority regarding the Area Developer's business. This ensures that there is a clear point of contact and accountability for Face Foundrie in dealing with the Area Developer. The agreement also stipulates that if the Operating Partner dies, becomes incapacitated, leaves the Area Developer's employment, transfers their interest, or otherwise ceases to supervise the development of the Facial Bars, a new Operating Partner must be promptly designated and approved by Face Foundrie.
Exhibit B of the Face Foundrie Area Development Agreement requires a list of all of the Area Developer's owners, including each owner's address and percentage of beneficial interest in Area Developer. Furthermore, Exhibit D, the Area Developer Certification, requires that each of the undersigned Principals certify that they own a beneficial interest in Area Developer, have read the Area Development Agreement, and agree to be individually bound by all obligations of Area Developer hereunder.