Is the Designated Manager required to have an equity interest in the franchisee entity for a Ledgers franchise?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
eration of your Franchised Business unless we permit otherwise in writing. You must devote your time, attention and best efforts to performing your obligations under the Franchise Agreement.
You must designate a Business Manager. If you are an individual, then you must serve as Business Manager. You must inform us in writing of the identity of your Business Manager, furnish information to us regarding the candidate's background, experience and credentials, and secure our advance written approval before you engage him or her. We will not unreasonably withhold or deny our approval. Your Business Manager must have complete decision-making authority with regard to your Franchised Business and must have authority to act on your behalf in all respects under the Franchise Agreement. Your Business Manager is the only individual with whom we will be required to communicate when we seek to communicate with you. Your Business Manager must complete the Initial Training Program to our satisfaction.
If you desire to designate a successor or replacement Business Manager, then you must notify us in writing; identify your proposed successor Business Manager and the reason that your predecessor Business Manager ceased to serve; furnish us with all information we may reasonably request regarding the proposed successor; and, obtain our advance written approval, which we will not unreasonably delay or deny.
You and any Business Manager must pass a background check. However, your Designated Manager is not required to have an equity interest in the franchisee, if it is an entity.
All owners of this franchise must guarantee the obligations under the Franchise Agreement. However, your spouse is not required to guarantee your performance under the Franchise Agreement.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 37–38)
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, the Designated Manager is not required to have an equity interest in the franchisee entity. However, the franchisee must designate a Business Manager who has complete decision-making authority regarding the Franchised Business and the authority to act on the franchisee's behalf in all respects under the Franchise Agreement.
The Business Manager is the only individual with whom Ledgers will be required to communicate when seeking to communicate with the franchisee. The Business Manager must also complete the Initial Training Program to Ledgers's satisfaction and pass a background check.
All owners of the Ledgers franchise must guarantee the obligations under the Franchise Agreement. The Business Manager must sign an employment contract with the franchisee containing confidentiality requirements and, to the extent permitted by law, a covenant not to solicit customers or compete against the franchisee or Ledgers.