Designated manager (approved operator)

A buyer meets this term when planning who will actually work in the unit, for example an owner who intends to hire a manager. The answer on who approves a franchise resale covers the buyer’s approval. Operator approval is a separate question to put to the franchisor.

What the disclosure rules require

Ontario’s O. Reg. 581/00, s. 6, requires the disclosure document to say whether the franchisee must participate personally and directly in the operation or, if the franchisee is a corporation, whether its principals must. Schedule 1, item 13, of Alberta’s Franchises Regulation asks the franchisor to state whether it requires the franchisee to participate personally in the direct operation of the franchise business. This entry covers Ontario and Alberta; check the rules where you are.

What to check or ask

• Whether the agreement requires an owner on site or allows a hired manager
• Whether the franchisor must approve a manager, and on what criteria
• Whether a manager must complete franchisor training, which Ontario’s regulation says the document must describe, including whether it is mandatory
• What notice is due when the manager changes