What constitutes 'control' according to the Focalpoint Coaching franchise agreement?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
Despite Subsection 12.C above, if Franchisee is fully complying with this Agreement, Franchisee may transfer this Agreement to a corporation or limited liability company which conducts no business other than the Franchised Business and, if applicable, other FocalPoint Franchised Businesses, in which Franchisee maintains management control, and of which Franchisee owns and controls one hundred percent (100%) of the equity and voting power of all issued and outstanding ownership interests, provided that all of the Franchised Business' assets are owned, and the Franchised Business' business is conducted, only by that single corporation or limited liability company. The corporation or limited liability company must expressly assume all of Franchisee's obligations under this Agreement. Transfers of ownership interests in the corporation or limited liability company are subject to the conditions of Subsection 12.C above that otherwise apply to non-controlling transfers. Franchisee agrees to remain personally liable under this Agreement as if the transfer to the corporation or limited liability company did not occur.
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
According to the 2025 Focalpoint Coaching Franchise Disclosure Document, 'control' is specifically addressed in the context of transferring the franchise to a corporation or limited liability company. In this scenario, the franchisee must maintain management control and own and control one hundred percent (100%) of the equity and voting power of all issued and outstanding ownership interests in the corporation or LLC. This ensures that the franchisee retains full authority over the business operations even after the transfer.
This requirement has significant implications for a Focalpoint Coaching franchisee. It means that while a franchisee can incorporate their business for legal or tax purposes, they cannot relinquish control to outside investors or partners. The franchisee must remain the sole decision-maker and equity holder. This protects the integrity of the Focalpoint Coaching brand and ensures that the franchised business continues to operate according to the franchisor's standards.
Furthermore, the FDD states that transfers of ownership interests in the corporation or limited liability company are subject to conditions that otherwise apply to non-controlling transfers. The franchisee also agrees to remain personally liable under the Franchise Agreement as if the transfer to the corporation or limited liability company did not occur. This indicates that Focalpoint Coaching places a high value on the franchisee's direct involvement and accountability, even when the business is operated through a corporate entity. This is a common practice in franchising, as franchisors typically want to ensure that franchisees are fully committed to the business and brand.