When is it permissible for Ledgers to repurchase a franchisee's business?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
Continuation of your territorial rights depends on achieving a certain growth. You cannot have declining revenue during two consecutive years ("Minimum Requirements"). A year will include each fiscal year (including any partial year) ending on December 31. If you fail to meet Minimum Requirements, then we reserve the right to establish a company-owned outlet selling the same or similar goods or services under the same or similar trademarks or service Marks.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, Ledgers reserves the right to establish a company-owned outlet if a franchisee fails to meet the minimum requirements for territorial rights continuation. These minimum requirements are defined as not having declining revenue during two consecutive fiscal years, with each fiscal year ending on December 31.
This means that if a Ledgers franchisee experiences declining revenue for two years in a row, Ledgers has the option to open a company-owned location that offers similar services under similar trademarks. This clause incentivizes franchisees to maintain consistent revenue and growth to protect their territory from potential competition from a company-owned outlet.
This condition is significant for prospective franchisees as it highlights the importance of consistent business performance. Failing to meet the minimum revenue requirements could lead to direct competition from Ledgers itself, potentially impacting the franchisee's business and market share. Franchisees should carefully consider their ability to meet these requirements and develop strategies to maintain stable or growing revenue streams.