If the Face Foundrie franchisee is an entity, what information needs to be provided in the agreement?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
- 1.03 Representations. Franchisee and its Owners, jointly and severally, represent and warrant to Franchisor that: (a) neither Franchisee nor any of its Owners have made any untrue statement of any material fact or has omitted to state any material fact in the written information submitted in obtaining the rights granted hereunder; (b) neither Franchisee nor any of its Owners have any direct or indirect legal or beneficial interest in any beauty-related business that may be deemed a Competitive Business, except as Franchisee has otherwise completely and accurately disclosed in writing to Franchisor in connection with obtaining the rights granted hereunder; and (c) the execution and performance of this Agreement will not violate any other agreement to which Franchisee or any of its Owners may be bound.
Franchisee recognizes that Franchisor has executed this Agreement in reliance on all of the statements Franchisee and its Owners have made in writing in connection with this Agreement.
- 1.04 Certain Definitions. The terms listed below have the meanings which follow them and include the plural as well as the singular.
Other terms are defined elsewhere in this Agreement in the context in which they arise.
- (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.
- (b) "Competitive Business" Any business operating or franchising an establishment (i) at which more than 10% of the offerings consists of facial services or beauty treatments for the face, or (ii) that offers waxing services.
Restrictions in this Agreement on competitive activities do not apply to: (i) the ownership or operation of other Face Foundrié Facial Bars that are licensed or franchised by Franchisor or any of its Affiliates; or (b) the ownership of shares of a class of securities that are listed on a public stock exchange or traded on the over-the-counter market and that represent less than five percent (5%) of that class of securities.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, if the franchisee is an entity, both the franchisee and its owners must provide certain representations and warranties to the franchisor. Specifically, they must warrant that all written information submitted to obtain the franchise rights is truthful and complete, without any misstatements or omissions of material facts. They also need to disclose any direct or indirect legal or beneficial interest in any beauty-related business that could be deemed a Competitive Business, unless already disclosed in writing to Face Foundrie. Finally, they must confirm that entering into the Franchise Agreement does not violate any other agreements they may be bound by. Face Foundrie emphasizes that it relies on these statements when executing the agreement.
In practical terms, this means that prospective Face Foundrie franchisees who operate as corporations, partnerships, or other business entities must ensure that all information provided during the application process is accurate and transparent. This includes disclosing any potential conflicts of interest, such as ownership in competing businesses. The owners of the entity are also held responsible for the accuracy of this information, highlighting the importance of due diligence and open communication among all parties involved.
The definition of "control" is also provided, meaning 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. The FDD also defines "Competitive Business" as any business operating or franchising an establishment (i) at which more than 10% of the offerings consists of facial services or beauty treatments for the face, or (ii) that offers waxing services. Restrictions in this Agreement on competitive activities do not apply to: (i) the ownership or operation of other Face Foundrié Facial Bars that are licensed or franchised by Franchisor or any of its Affiliates; or (b) the ownership of shares of a class of securities that are listed on a public stock exchange or traded on the over-the-counter market and that represent less than five percent (5%) of that class of securities.
Failure to provide accurate information or to disclose relevant interests could have serious consequences, potentially leading to a breach of the Franchise Agreement. Therefore, prospective franchisees should carefully review all application materials and consult with legal counsel to ensure full compliance with these requirements. This protects both the franchisee and Face Foundrie by establishing a clear understanding of the franchisee's obligations and ensuring a fair and transparent business relationship.