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ARTICLE XIV

SUB-FRANCHISE MEMBERS

As stated in Article I of this Constitution, the purpose of the League is to increase participation in amateur baseball by making membership available to all who qualify under the rules of the League. If all new memberships were limited to franchises, co-franchises and limited franchises, participation in the League would be unduly limited, particularly in the younger age divisions, where members with large school districts tend to have more than enough players to populate their teams. Since most of the largest school districts in the League area are already franchised in the League as either primary or secondary core areas, it would be an impediment to League participation not to provide some mechanism to allow multiple owner participation in certain areas. To encourage maximum League participation in such areas the League has created a special fourth class of membership called the sub-franchise.

Under a sub-franchise agreement, an existing franchise member voluntarily grants an applicant team and restricted player rights in his primary core area and possibly other portions of his franchise area.

Section 14.1 Qualifications

To qualify for a sub-franchise membership, an applicant must:

(1) Successfully negotiate a Shared Participation Agreement (SPA) with the existing franchise owner.

(2) Register at least two different teams in the League for three consecutive years where at least one team is aged 15U or younger.

(3) Register teams in the same age division in any two of those three years (replacement participation).

Existing members are under no obligation to enter into such agreements. Any special restrictions imposed on the sub-franchisee are stipulated in the SPA. The League may assist in the negotiation of the SPA.

Section 14.2 General Participation Rights

RULE 61 A sub-franchise is granted the right to participate in the League at all age divisions and its rights to restricted players in the primary core area of the franchise area shall be equal to those of the host franchise.

The sub-franchise agreement may extend to other, non-discretionary franchise area as well. Limitations may be placed on the maximum allowable number of teams participating in each age division. All such extensions or restrictions shall be a matter of negotiation between the host franchise and its sub-franchise, and shall be stipulated in the SPA.

RULE 61 Once granted, a sub-franchise can not be arbitrarily terminated by its host franchise.

To terminate a sub-franchise arrangement the sub-franchisee would have to be found to be in violation of the SPA, or other league rules, or fail to register teams in the League’s younger age divisions, 15U and below. Should the sub-franchise membership be terminated for any reason, all teams owned by the sub-franchise, already started in the League, shall be entitled to continue in the League from one year to the next, provided they remain in good standing.

Section 14.3 Franchise Area Rights

The franchise area is owned exclusively by the franchise member. The sub-franchise has no territorial ownership rights.

Section 14.4 General Player Rights

See Article XVI for a comprehensive discussion of member’s rights to players.

RULE 62 The first year roster of any sub-franchise applicant shall be limited to players that did not participate in the league in the previous year.

A non-discretionary release shall be sufficient to allow any restricted free agent to be added to the applicant’s official League roster i.e., for this purpose, the sub-franchise shall be viewed no differently than than its parent franchise.

RULE 63 Roster additions in subsequent years shall be regulated in the same manner as any franchise member.

Sub-franchises are entitled to add to their rosters any unrestricted free agents as well as restricted players from within the part of the host franchise area that has been sub-franchised. The latter would include the primary core area of the franchise area as well as any other area specifically granted by the host franchise member in the SPA establishing the sub-franchise.

RULE 64 The roster of a sub-franchise member is protected within the League from one year to the next.

Section 14.5 Player Release Rights

By rule 38, sub-franchises have no power to grant releases to protected or restricted players. The host franchise shall have the exclusive power to release its own protected players as well as those of the sub-franchise, and all restricted players within the franchise area.