Can Ledgers disapprove a Business Manager submitted by a franchisee?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
You must operate the Franchise Business personally, unless you submit to us a Business Manager who attends and successfully completes our Initial Franchisee Training course, and who is not later disapproved by us. However, you will be responsible to ensure that the Business Manager fulfills all your responsibilities under this Agreement. Delegation of tasks to a Business Manager does not reduce any liability that you may have under this Agreement. Furthermore, your Business Manager must sign an employment contract with you containing confidentiality requirements and, to the extent permitted by law, a covenant not to solicit customers or compete against you or us.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, a franchisee must personally operate the Franchise Business unless they submit a Business Manager to Ledgers. Ledgers has the right to disapprove a Business Manager, even if that manager attends and successfully completes the Initial Franchisee Training course.
Even if a Business Manager is approved, the franchisee remains responsible for ensuring that the Business Manager fulfills all responsibilities outlined in the Franchise Agreement. The franchisee's liability under the agreement is not reduced by delegating tasks to a Business Manager.
Furthermore, the Business Manager must sign an employment contract with the franchisee. This contract must include confidentiality requirements and, where legally permissible, a covenant not to solicit customers or compete against the franchisee or Ledgers. This requirement aims to protect the franchisee's and Ledgers' interests by preventing the Business Manager from using confidential information or competing unfairly.
This clause highlights the importance Ledgers places on the franchisee's active involvement in the business, while also providing a mechanism for franchisees to delegate management responsibilities under specific conditions and with Ledgers' approval. Prospective franchisees should carefully consider these requirements and ensure they can either personally manage the business or find a suitable Business Manager who meets Ledgers' criteria.