What ownership interest must a new Operating Partner have in the Face Foundrie Area Development Agreement?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section(s) in | Summary | |
|---|---|---|---|
| Area Development Agreement | rights or obligations under the Area Development Agreement, or any material asset of your business, without our prior written consent, which shall be subject to all of the conditions and requirements for transfers set forth in the Franchise Agreement executed simultaneously with the Area Development Agreement that we deem applicable to a proposed transfer under the Area Development Agreement. | ||
| (l) Franchisor approval | Section 7.2 | We have the right to approve transfers. | |
| of transfer by area | |||
| developer | |||
| (m) Conditions for franchisor’s approval of transfer | Sections 7.2 and 7.3 | Unless waived, a transfer of the Area Development Agreement is conditioned on, among other factors, the requirement that the proposed transfer of the Area Development Agreement be made in conjunction with a simultaneous transfer of all existing Franchise Agreements to the same approved transferee. Additionally, your first Facial Bar under your first Franchise Agreement must be open and operating. | |
| (n) Franchisor’s right of | Not Applicable | ||
| first refusal to acquire | |||
| area developer’s | |||
| business | |||
| (o) Franchisor’s option to | Not Applicable | ||
| purchase area | |||
| developer’s business | |||
| (p) Death or disability of area developer | Section 5.2 | In the event your Operating Partner dies or becomes incapacitated, you must designate a new Operating Partner that owns at least a 20% ownership interest in you, subject to our approval. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION OF THE FRANCHISE RELATIONSHIP (FDD pages 51–59)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, if the Operating Partner dies or becomes incapacitated, the Area Developer must designate a new Operating Partner. This new Operating Partner is required to own at least 20% ownership interest in the Area Development Agreement, subject to Face Foundrie's approval.
This requirement ensures that the new Operating Partner has a significant stake in the business, aligning their interests with the success of the Face Foundrie area development. The franchisor's approval is necessary to maintain control over who is managing and operating the business, ensuring they meet the brand's standards and qualifications.
For a prospective Face Foundrie Area Developer, this means being prepared to find a replacement Operating Partner who is willing to invest in at least 20% ownership. It also highlights the importance of having a succession plan in place to address unforeseen circumstances such as the death or incapacitation of the Operating Partner. This provision aims to provide stability and continuity in the management of the area development.