If a Ledgers franchisee uses a Business Manager, does this arrangement reduce the franchisee's liability under the Franchise Agreement?
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 the 2025 Ledgers Franchise Disclosure Document, delegating tasks to a Business Manager does not reduce a franchisee's liability under the Franchise Agreement. The franchisee remains responsible for ensuring that the Business Manager fulfills all responsibilities outlined in the agreement.
This means that even if a Ledgers franchisee hires a Business Manager to handle the day-to-day operations, the franchisee is still ultimately accountable for any failures or breaches of contract. This includes ensuring the Business Manager complies with confidentiality requirements and any non-solicitation or non-compete covenants.
Prospective Ledgers franchisees should understand that hiring a Business Manager is a privilege that requires franchisor approval and adherence to specific conditions, such as the Business Manager completing the initial training course. The franchisee cannot simply delegate responsibility and expect to be shielded from liability. The employment contract between the franchisee and the Business Manager must also contain specific clauses to protect the Ledgers business.
This clause is fairly standard in franchising, as the franchisor needs to ensure brand standards are upheld and the franchisee is ultimately responsible for the success of their business, regardless of who they employ to manage it.