What specific requirements must be included in the employment contract between a Ledgers franchisee and their Business Manager?
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 Ledgers' 2025 Franchise Disclosure Document, if a franchisee chooses to employ a Business Manager, the employment contract between the franchisee and the Business Manager must include specific requirements. The contract must contain confidentiality requirements. Additionally, the contract must include a covenant not to solicit customers or compete against the franchisee or Ledgers, to the extent permitted by law.
This requirement ensures that the franchisee's business interests and Ledgers' brand are protected. The confidentiality requirements prevent the Business Manager from disclosing sensitive business information, while the non-solicitation and non-compete covenants prevent the Business Manager from taking clients or starting a competing business after leaving the franchisee's employment.
The phrase "to the extent permitted by law" acknowledges that the enforceability of non-solicitation and non-compete agreements can vary by jurisdiction. Franchisees should consult with legal counsel to ensure that these covenants are enforceable in their specific location. This is a fairly standard requirement in franchise agreements to protect the franchisor and franchisee's investment in the business and customer relationships.