What happens if a Ledgers franchisee is indicted for a felony?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
CHISE DISCLOSURE DOCUMENT. HOWEVER, THE FRANCHISOR CAN NOT USE THE NEGOTIATING PROCESS TO PREVAIL UPON A PROSPECTIVE FRANCHISEE TO ACCEPT TERMS THAT ARE LESS FAVORABLE THAN THOSE SET FORTH IN THIS FRANCHISE DISCLOSURE DOCUMENT.**
- The following is added at the end of Item 3:
With the exception of what is stated above, the following applies to the franchisor, its predecessor, a person identified in Item 2, or an affiliate offering franchises under the franchisor's principal trademark:
- A. No such party has an administrative, criminal or civil action pending against that person alleging: a felony, a violation of a franchise, antitrust, or securities law, fraud, embezzlement, fraudulent conversion, misappropriation of property, unfair or deceptive practices, or comparable civil or misdemeanor allegations.
- B. No such party has pending actions, other than routine litigation incidental to the business, which are significant in the context of the number of franchisees and the size, nature or financial condition of the franchise system or its business operations.
- C. No such party has been convicted of a felony or pleaded nolo contendere to a felony charge or, within the 10-year period immediately preceding the application for registration, has been convicted of or pleaded nolo contendere to a misdemeanor charge or has been the subject of a civil action alleging: violation of a franchise, antifraud, or securities law; fraud; embezzlement; fraudulent conversion or misappropriation of property; or unfair or deceptive practices or comparable allegations.
- D.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
The 2025 Ledgers Franchise Disclosure Document (FDD) does not explicitly state what happens if a Ledgers franchisee is indicted for a felony. However, the FDD does state that no party has an administrative, criminal, or civil action pending against that person alleging a felony. This applies to the franchisor, its predecessor, a person identified in Item 2, or an affiliate offering franchises under the franchisor's principal trademark.
Item 17(m) of the Ledgers Franchise Agreement, entitled "Conditions for franchisor approval of transfer", has additional stipulations. Item 17(c), titled "Requirements for franchisee to renew or extend," also has additional stipulations.
To fully understand the implications of a felony indictment on a Ledgers franchise, prospective franchisees should seek clarification from the franchisor regarding the specific policies and procedures that would be enacted in such a situation. This information is crucial for making an informed decision about investing in a Ledgers franchise.