factual

Does Golden Krust Caribbean Restaurant have the obligation to appoint a manager after the death or disability of the franchisee?

Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDD

Answer from 2024 FDD Document

(2) Operation Upon Death or Disability. If, upon your death or disability or the death or disability of the owner of a controlling interest in you, the Restaurant is not being managed by a trained manager, your or such owner's executor, administrator, conservator, guardian or other personal representative must within a reasonable time, not exceed fifteen (15) days from the date of death or disability, appoint a manager to operate the Restaurant. Such manager will be required to complete training at your expense. Pending the appointment of a manager as provided above or if, in our judgment, the Restaurant is not being managed properly any time after your death or disability or after the death or disability of the owner of a controlling interest if you, we have the right, but not the obligation, to appoint a manager for the Restaurant. All funds from the operation of the Restaurant during the management by our appointed manager will be kept in a separate account, and all expenses of the Restaurant, including compensation, other costs and travel and living expenses of our manger, will be charged to this account. We also have the right to charge a reasonable management fee (in addition to the Royalty and Advertising Fund contributions payable under this Agreement) during the period that our appointed manager manages the Restaurant. Operation of the Restaurant during any such period will be on your behalf, provided that we only have a duty to utilize our best efforts and will not be liable to you or your owners for debts, losses or obligations incurred by the Restaurant or to any of your creditors for any products, materials, supplies or services the Restaurant purchases during any period it is managed by our appointed manager.

Source: Item 22 — CONTRACTS (FDD page 35)

What This Means (2024 FDD)

According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, in the event of the death or disability of a franchisee or the owner of a controlling interest, the executor, administrator, conservator, guardian, or other personal representative is required to appoint a manager to operate the restaurant within fifteen (15) days, provided the restaurant is not already being managed by a trained manager. This manager must complete training at the expense of the franchisee or owner's estate.

However, Golden Krust Caribbean Restaurant retains the right, but not the obligation, to appoint a manager if they believe the restaurant is not being managed properly following the death or disability. If Golden Krust Caribbean Restaurant does appoint a manager, all funds from the restaurant's operation will be kept in a separate account, and all restaurant expenses, including the manager's compensation, costs, and travel expenses, will be charged to this account. Golden Krust Caribbean Restaurant also has the right to charge a reasonable management fee in addition to the standard royalty and advertising fund contributions.

The operation of the Golden Krust Caribbean Restaurant during this period will be on behalf of the franchisee or owner, but Golden Krust Caribbean Restaurant's duty is limited to using its best efforts. They will not be liable for any debts, losses, or obligations incurred by the restaurant or to any of the franchisee's creditors for purchases made during the period managed by their appointed manager. This arrangement ensures the continued operation of the restaurant while the estate is settled or a transfer of ownership is arranged.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.