In the context of the Face Foundrie franchise agreement, what information is required regarding the franchisee's operating partner's interest?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
ner and the percentage of such interest owned by such Owner. Franchisee agrees to notify Franchisor in writing whenever there is any change in the organizational structure or ownership interest of Franchisee as set forth on Exhibit B. Franchisor may require each Owner owning an interest in Franchisee and each Owner's spouse to execute the Personal Guaranty attached hereto as Exhibit C.
8.03 Management of Facial Bar.
- (a) Franchisee must designate on Exhibit B an "Operating Partner", which individual must be approved by Franchisor and: (a) own and control, or have the right to own and control (subject to terms and conditions reasonably acceptable to Franchisor), not less than a twenty percent (20%) interest in Franchisee's equity and voting rights; (b) have the authority to bind Franchisee regarding all operational decisions with respect to the Facial Bar; and (c) have completed Franchisor's training program to its satisfaction. The Operating Partner must devote full-time efforts to the Facial Bar, and the Operating Partner may not engage in any other business or activity, directly or indirectly, that requires substantial management responsibility or time commitments or otherwise that may conflict with his or her obligations hereunder without our approval.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, the franchisee must designate an Operating Partner who meets specific criteria. This individual must be approved by Face Foundrie and own or have the right to own and control at least 20% interest in the franchisee's equity and voting rights. The Operating Partner must also have the authority to make operational decisions for the Face Foundrie Facial Bar and must complete Face Foundrie's training program to their satisfaction.
The franchisee is required to provide Face Foundrie with a copy of any proposed arrangement, agreement, or contract with the Operating Partner, including all amendments, for prior review and approval. Once approved, executed copies must be provided to Face Foundrie. The Operating Partner is expected to devote full-time efforts to the Facial Bar and cannot engage in other conflicting business activities without Face Foundrie's approval.
Furthermore, the franchisee must inform Face Foundrie in writing about the identity of the Operating Partner and any changes to this role. If the Operating Partner ceases to own at least a 20% ownership and voting interest or fails to meet Face Foundrie's requirements, the franchisee must designate a new Operating Partner within 30 days for Face Foundrie's review and approval. This ensures that Face Foundrie maintains a consistent standard of management and operational control across all its franchised locations.