What are the requirements for designating an 'Operating Principal' for an Hck Hot Chicken franchise?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
The Operating Principal shall be vested with the authority and responsibility for the day-to-day operations of the Franchised Restaurant and all other Restaurants owned or operated, directly or indirectly, by Franchisee or its Affiliates within a geographic area specified by Franchisor.
The Operating Principal shall, during the entire period he or she serves as such, meet the following qualifications: (a) unless otherwise agreed in writing, shall devote one hundred percent (100%) of his/her time and best efforts to the operation of all Restaurants owned or operated, directly or indirectly, by Franchisee or its Affiliates in such geographic area; (b) meet Franchisor's educational, experience, financial and other reasonable criteria for such position, as set forth in the HCK Hot Chicken Brand Standards Manual or otherwise in writing by Franchisor; (c) be an Owner with ten percent (10%) or more (directly or indirectly), in the aggregate, of the Equity or voting rights in Franchisee; and (d) be an individual acceptable to Franchisor.
The Operating Principal must be approved by Franchisor in writing.
The Operating Principal shall be responsible for all actions necessary to ensure that all Restaurants owned or operated, directly or indirectly, by Franchisee in such geographic area are operated in compliance with this Agreement and the HCK Hot Chicken Brand Standards Manual.
If during the Term the Operating Principal is not able to continue to serve in such capacity or no longer qualifies to act as such in accordance with this Section (including Franchisor's subsequent disapproval of such person), Franchisee shall promptly notify Franchisor of such occurrence.
Thereafter, Franchisee shall promptly, but not later than 30 days after the prior Operating Principal ceases to serve Franchisee, (w) designate a replacement operating principal who meets Franchisor's then-current qualification requirements, (x) provide Franchisor with such information about such new Operating Principal as Franchisor may request, (y) cause such replacement Operating Principal to undergo, at Franchisee's cost, such training as Franchisor may require, and (z) obtain Franchisor's written acceptance of such person as the Operating Principal.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)
What This Means (2025 FDD)
According to Hck Hot Chicken's 2025 Franchise Disclosure Document, the Operating Principal is responsible for the day-to-day operations of the franchised restaurant and any other restaurants owned or operated by the franchisee or its affiliates within a specified geographic area. The Operating Principal acts on behalf of the franchisee in business, operational, and other ongoing matters, including administering or amending the franchise agreement.
The requirements for the Operating Principal include devoting 100% of their time and effort to the operation of all restaurants owned or operated by the franchisee or its affiliates, unless otherwise agreed in writing by Hck Hot Chicken. They must also meet Hck Hot Chicken's criteria for the position, including educational, experience, and financial standards, as detailed in the HCK Hot Chicken Brand Standards Manual or in writing by Hck Hot Chicken. The Operating Principal must have at least 10% ownership or voting rights in the franchisee and must be approved in writing by Hck Hot Chicken.
If the Operating Principal can no longer serve or no longer qualifies, the franchisee must notify Hck Hot Chicken and designate a replacement within 30 days. The replacement must meet Hck Hot Chicken's current qualification requirements, provide requested information, undergo required training at the franchisee's expense, and receive written acceptance from Hck Hot Chicken. Hck Hot Chicken may communicate exclusively with the Operating Principal unless notified of a successor.
The franchisee must notify Hck Hot Chicken in writing at least ten days before employing the Operating Principal, providing all reasonably requested information. Hck Hot Chicken's acceptance of the Operating Principal does not guarantee their performance or prevent Hck Hot Chicken from later challenging their qualifications or performance. The operation of the franchised restaurant must always be under the direct control of the Operating Principal or a Restaurant Manager. If this is the first restaurant operated by the franchisee or its affiliates in the trade area, the franchisee (or franchisee's Operating Principal) must be adequately trained and the franchisee must have three certified Restaurant Managers in the Restaurant for at least the first 30 days of operation. If this is the second or subsequent Restaurant in the same trade area, the franchisee must have a minimum of two certified Restaurant Managers for at least the first 30 days of operation, and then no less than one certified Restaurant Manager from then on.