Under what conditions can Ledgers withhold or deny approval of a Business Manager?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
You must participate personally in the day-to-day operation of your Franchised Business unless we permit otherwise in writing. You must devote your time, attention and best efforts to performing your obligations under the Franchise Agreement.
You must designate a Business Manager. If you are an individual, then you must serve as Business Manager. You must inform us in writing of the identity of your Business Manager, furnish information to us regarding the candidate's background, experience and credentials, and secure our advance written approval before you engage him or her. We will not unreasonably withhold or deny our approval. Your Business Manager must have complete decision-making authority with regard to your Franchised Business and must have authority to act on your behalf in all respects under the Franchise Agreement. Your Business Manager is the only individual with whom we will be required to communicate when we seek to communicate with you. Your Business Manager must complete the Initial Training Program to our satisfaction.
If you desire to designate a successor or replacement Business Manager, then you must notify us in writing; identify your proposed successor Business Manager and the reason that your predecessor Business Manager ceased to serve; furnish us with all information we may reasonably request regarding the proposed successor; and, obtain our advance written approval, which we will not unreasonably delay or deny.
You and any Business Manager must pass a background check. However, your Designated Manager is not required to have an equity interest in the franchisee, if it is an entity.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 37–38)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, franchisees must designate a Business Manager to oversee the day-to-day operations of their franchised business, unless Ledgers provides written permission otherwise. If the franchisee is an individual, they must serve as the Business Manager. Before engaging a Business Manager, the franchisee must inform Ledgers in writing of the candidate's identity, provide information regarding their background, experience, and credentials, and secure Ledgers' advance written approval.
Ledgers states that it will not unreasonably withhold or deny approval of a Business Manager. The Business Manager must have complete decision-making authority regarding the franchised business and the authority to act on the franchisee's behalf in all respects under the Franchise Agreement. The Business Manager is the primary point of contact for Ledgers when they need to communicate with the franchisee. Additionally, the Business Manager must complete the Initial Training Program to Ledgers' satisfaction.
If a franchisee wants to designate a successor or replacement Business Manager, they must notify Ledgers in writing, identify the proposed successor, explain why the predecessor Business Manager left, provide all reasonably requested information about the proposed successor, and obtain Ledgers' advance written approval, which Ledgers states they will not unreasonably delay or deny. Both the franchisee and any Business Manager must pass a background check. The Designated Manager is not required to have an equity interest in the franchisee if the franchisee is an entity.
It is common practice in franchising for franchisors to have approval rights over key management personnel to ensure brand standards and operational consistency are maintained. While Ledgers states they will not unreasonably withhold approval, prospective franchisees should clarify with Ledgers what specific criteria or factors could lead to a denial of a Business Manager to fully understand the approval process and potential limitations.