What is the consequence if a Ledgers franchisee fails to meet the Minimum Requirements?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
Continuation of your territorial rights depends on achieving a certain growth. You cannot have declining revenue during two consecutive years ("Minimum Requirements"). A year will include each fiscal year (including any partial year) ending on December 31. If you fail to meet Minimum Requirements, then we reserve the right to establish a company-owned outlet selling the same or similar goods or services under the same or similar trademarks or service Marks.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, a franchisee's territorial rights are contingent upon achieving a certain level of growth. The minimum requirement is that the franchisee cannot have declining revenue during two consecutive fiscal years, with each fiscal year ending on December 31.
If a Ledgers franchisee fails to meet these minimum requirements, Ledgers reserves the right to establish a company-owned outlet that offers similar goods or services under the same or similar trademarks or service marks. This means that if a franchisee's revenue declines for two years in a row, Ledgers could open a competing business in the same territory.
This provision highlights the importance of consistent revenue growth for Ledgers franchisees. It also illustrates a potential risk, as failure to maintain growth could lead to direct competition from the franchisor within the franchisee's own territory. Prospective franchisees should carefully consider their ability to meet these minimum requirements and the potential impact of this clause on their business.