Is the Manager of a Marble Slab Creamery entitled to compensation for management services rendered to the Company?
Marble_Slab_Creamery Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) selling all or substantially all of the assets of the Company; and
- (d) admitting additional or successor Managers.
- 5.3 Compensation of the Manager. The Manager shall receive no compensation for management services rendered to the Company. However, the Manager shall be reimbursed by the Company for reasonable out-of-pocket expenses incurred by the Manager in connection with the Company's business.
- 5.4 Agents. The Manager may authorize one or more agents to enter into any contract or to otherwise act on behalf of the Company to the extent that the Manager could take such action. Such authority may be general or be confined to specific instances. Unless authorized to do so by this Agreement or by the Manager, no Member, employee or other agent of the Company shall have any power or authority to bind the Company in any way, to pledge its credit or to render it liable for any purpose.
- 5.5 Right to Rely on Manager. Any person dealing with the Company may rely (without duty of further inquiry) upon a certificate signed by the Manager as to the identity and authority of the Manager or other person to act on behalf of the Company.
- 5.6 Removal and Replacement of Manager. The Manager may be removed by a Supermajority Percentage Interest of the Members. If the Manager ceases to act as manager of the Company, Members holding a Supermajority Percentage Interest may designate a successor Manager.
Source: Item 23 — RECEIPT (FDD pages 101–346)
What This Means (2025 FDD)
According to the 2025 Marble Slab Creamery FDD, the Manager of the Company will not receive compensation for management services. However, the Manager will be reimbursed for reasonable out-of-pocket expenses incurred while conducting business for the Company.
This means that while the Manager won't be paid a salary or wages for their management role, they can get reimbursed for expenses like travel or supplies purchased for the business. This arrangement could be beneficial if the Manager is also an owner or member of the company, as it allows them to receive profits through distributions rather than a salary.
However, it's important to note that the Manager can be removed by a Supermajority Percentage Interest of the Members, and a successor Manager can be designated if the current Manager ceases to act in that capacity. Prospective franchisees should clarify what constitutes "reasonable out-of-pocket expenses" and the process for reimbursement to avoid potential disputes.