If the Operating Principal of a Red Wagon Club franchise does not supervise full-time, what is required?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
If your Operating Principal does not wish to supervise your RWC Business on a full-time basis, you must appoint a manager who has completed the Training Programs to work full-time to supervise the operation of your RWC Business (the "Designated Manager"). We may establish minimum qualifications for any such Designated Manager, which may include completion of training programs, confirmation that they will have no competitive business activities, and/or execution of a non-disclosure agreement or other covenants we require. If any Designated Manager ceases to act as your RWC Business's Designated Manager, your Operating Partner must manage your RWC Business until such time as a replacement Designated Manager has satisfactorily completed the training programs and meets our then-current minimum qualifications. The Designated Manager does not need to own an equity ownership in you.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISED BUSINESS (FDD page 37)
What This Means (2024 FDD)
According to the 2024 Red Wagon Club Franchise Disclosure Document, if the Operating Principal does not supervise the Red Wagon Club business on a full-time basis, the franchisee must appoint a Designated Manager. This Designated Manager must have completed the required Training Programs and work full-time to supervise the operation of the Red Wagon Club business.
The Red Wagon Club may establish minimum qualifications for the Designated Manager, which could include completing training programs, confirming they will not engage in competitive business activities, and/or signing a non-disclosure agreement or other required covenants. If the Designated Manager stops serving in that role, the Operating Partner must manage the Red Wagon Club business until a replacement Designated Manager is found who meets the training and qualification requirements.
It is important to note that the Designated Manager does not need to have any equity ownership in the franchise. This arrangement allows for flexibility in managing the business while ensuring that someone with the appropriate training and qualifications is always overseeing operations. The franchisee should confirm with Red Wagon Club what the then-current minimum qualifications are for the Designated Manager.