For a Management Recruiters franchise, can the General Manager be someone appointed by the franchisee?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
A General Manager, which may be you or a person appointed by you, must directly supervise the Franchised Business on its premises and devote full time and effort to operation of the Franchised Business. The General Manager may be a principal of the member if member is an entity. A General Manager must attend and complete all training required of a member and sign a Confidentiality and Non-Competition Agreement prior to taking over as General Manager. The General Manager is not required to be a shareholder in the franchised business.
Any shareholder in the franchisee entity will be obligated to sign a personal guaranty and agree to accept all obligations of the Franchise Agreement. You are required to ensure all owners, members, shareholders, employees and others who work in the franchise, or who have access to confidential information agree to keep all confidential information confidential. MRI does not require a spouse, not involved in the operation of the Franchised Business, to enter a personal guaranty or confidentiality and non-compete agreement, however, MRI does reserve all rights under law in jurisdictions that allow for restrictions on competitive activities by spouses.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 47–48)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, a franchisee can appoint a General Manager to directly supervise the franchised business. The General Manager must devote their full time and effort to the operation. The General Manager can be the franchisee themselves or a person appointed by them, including a principal of the member if the member is an entity.
The appointed General Manager must meet certain qualifications. They must meet Management Recruiters' standards and criteria for the role, be acceptable to Management Recruiters, and devote their full time and best efforts to the supervision and management of the franchise. The General Manager cannot engage in any other business activity without Management Recruiters' consent.
Prior to taking over as General Manager, the appointee must attend and complete all training required of a member and sign a Confidentiality and Non-Competition Agreement. While the General Manager is not required to be a shareholder in the franchised business, any shareholder in the franchisee entity will be obligated to sign a personal guaranty and agree to accept all obligations of the Franchise Agreement.