What is the effect of the Managing Principal's decisions on the Franchisee for a Precision Door Service franchise?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
y written instrument signed by you and Franchisor, and (ii) is separate from any other agreement regarding conditions to Franchisor's consent to the Transfer or any agreement between Buyer and Seller regarding the Transfer. There are no representations of any kind except as contained herein. This Agreement will be binding upon and inure to the benefit of the parties, their legal representatives, successors, and assigns.
Buyer: By: Name: Title: Date: Owner: An Individual
EXHIBIT M-1
PRIVATE EQUITY ADDENDUM TO FRANCHISE AGREEMENT
PRIVATE EQUITY ADDENDUM TO FRANCHISE AGREEMENT
(Precision Door Service)
| Balance as of December 31, 2021 | $1,739,192 | |---|---| | Adjustment to goodwill for unrealized gain/loss on foreign currency | (10,608 ) | | Balance as of December 31, 2022 (Restated) | $1,728,584 | | Adjustment to goodwill for unrealized gain/loss on foreign currency | 4,069 | | Balance as of December 31, 2023 | $1,732,653 | or any other provision of the Franchise Agreement, PE Owner will not be required to devote full-time attention to the Business; provided that the Business shall be at all times under the direct and active supervision and management of a qualified individual (the "Managing Principal") who meets Franchisor's then-current experience, reputation, leadership and education criteria, possesses all required trade and/or business licenses and permits, and completes all required training to Franchisor's satisfaction ("Managing Principal Criteria"). For the avoidance of doubt, the Managing Principal shall not be required to own any equity interest in the Franchisee. PE Owner will not be required to complete Franchisor's training program;
Source: Item 23 — Receipts (FDD pages 92–433)
What This Means (2025 FDD)
According to the 2025 Precision Door Service FDD, if the franchisee is a PE Owner, they are not required to devote full-time attention to the business, provided that the business is under the direct and active supervision of a qualified Managing Principal. This Managing Principal must meet Precision Door Service's criteria for experience, reputation, leadership, and education, possess all required licenses and permits, and complete all required training. The Managing Principal is not required to own any equity in the franchise.
The Managing Principal has primary responsibility for managing the Precision Door Service business. The FDD states explicitly that the Managing Principal has the authority to make all decisions on behalf of the franchisee, and these decisions will legally bind the franchisee. This means the franchisee is legally obligated to follow through on any decisions made by the Managing Principal within the scope of their management responsibilities.
If the franchisee chooses to replace the Managing Principal, any new Managing Principal must meet Precision Door Service's criteria. This ensures that the replacement Managing Principal is qualified to manage the Precision Door Service business effectively. This requirement protects the integrity of the Precision Door Service brand and ensures consistent quality of service across all franchise locations.