Can Red Wagon Club require a Designated Manager to have no competitive business activities?
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 Red Wagon Club's 2024 Franchise Disclosure Document, if the Operating Principal of a Red Wagon Club franchise does not wish to supervise the RWC Business on a full-time basis, a Designated Manager must be appointed. The Designated Manager must have completed the Training Programs and work full-time to supervise the operation of the RWC Business.
Red Wagon Club may establish minimum qualifications for the Designated Manager. These qualifications 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 that Red Wagon Club requires.
If the Designated Manager ceases to act as the RWC Business's Designated Manager, the Operating Partner must manage the RWC Business until a replacement Designated Manager has satisfactorily completed the training programs and meets Red Wagon Club's then-current minimum qualifications. The Designated Manager does not need to own equity in the franchise.