For a Ledgers franchise, what are the consequences if a Business Manager does not sign an employment contract with the required confidentiality and non-solicitation clauses?

According to Ledgers' 2025 Franchise Disclosure Document, if you designate a Business Manager to operate your franchise, that Business Manager must sign an employment contract with you. This contract must contain confidentiality requirements and, to the extent permitted by law, a covenant not to solicit customers or compete against you or Ledgers.

The FDD does not explicitly state the consequences of a Business Manager not signing this required employment contract. However, it does state that you are responsible for ensuring that the Business Manager fulfills all your responsibilities under the Franchise Agreement. Failure to have the Business Manager sign the required employment contract could be interpreted as a failure to fulfill your responsibilities.

Without a signed employment contract with the required clauses, the Ledgers franchisee risks the Business Manager disclosing confidential information or soliciting clients, which could harm the franchise. It is important to ensure that the Business Manager signs the employment contract to protect the Ledgers business.

To fully understand the consequences of not having a Business Manager sign the required employment contract, a prospective franchisee should seek clarification from Ledgers regarding potential penalties or repercussions for non-compliance. This will help ensure full compliance with the Franchise Agreement and protect the franchisee's investment.