What right does Ledgers reserve if a franchisee fails to meet the Minimum Requirements?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
Continuation of your territorial rights depends on achieving a certain sales 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 the 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 12 — TERRITORY (FDD pages 32–34)
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, if a franchisee fails to meet the Minimum Requirements, Ledgers reserves specific rights regarding the establishment of company-owned outlets. The Minimum Requirements are defined as not having declining revenue for two consecutive fiscal years, with each fiscal year ending on December 31.
Specifically, if a Ledgers franchisee fails to meet these Minimum Requirements, Ledgers reserves the right to establish a company-owned outlet within the franchisee's territory. This company-owned outlet would sell the same or similar goods or services under the same or similar trademarks or service marks as the franchise.
This provision has significant implications for prospective franchisees. It means that a franchisee's continued territorial rights are directly tied to maintaining a certain level of sales growth. Failure to do so not only impacts the franchisee's revenue but also opens the door for Ledgers to directly compete within the franchisee's own territory by establishing a company-owned outlet. This could substantially undermine the franchisee's business and reduce its value. Therefore, it is crucial for potential franchisees to carefully consider the sales growth expectations and their ability to meet them before investing in a Ledgers franchise.