What is the definition of 'Entity' within the Face Foundrie franchise agreement?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) "Affiliate" Any Person that directly or indirectly owns or controls the referenced party, that is directly or indirectly owned or controlled by the referenced party, or that is under common control with the referenced party.
The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an Entity, whether through ownership of voting securities, by contract or otherwise.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, the term 'control' as it relates to an 'Entity' is defined. The document states that control means possessing the power to direct the management and policies of an Entity, whether through ownership of voting securities, by contract, or other means. This definition is important because it clarifies how Face Foundrie determines whether a person or entity has influence over another, which can have implications for compliance with the franchise agreement, particularly regarding competitive businesses or conflicts of interest.
For a prospective Face Foundrie franchisee, understanding this definition is crucial. It means that if you, as a franchisee, have the ability to influence the management or policies of another business (or vice versa), Face Foundrie may consider that business an affiliate. This could trigger certain obligations or restrictions under the franchise agreement, such as those related to competitive businesses.
For example, if a franchisee owns a significant portion of the voting shares of another company, even if it's not a majority, Face Foundrie might consider the franchisee to have control over that company if that ownership allows them to influence the company's decisions. Similarly, if a franchisee has a contractual agreement that gives them the power to direct the management of another entity, that would also constitute control. Therefore, franchisees need to be aware of any existing or potential relationships that could be interpreted as control, as defined by Face Foundrie, to avoid violating the terms of their franchise agreement.