Bang_Cookies 2024 Franchise FAQ - FDD Ninja

Question 1

What actions by a Bang Cookies franchisee related to insolvency will lead to automatic termination of the franchise agreement?

Accepted Answer

Franchisor possesses the right, at Franchisor's option, to terminate this Agreement and all rights granted to Franchisee hereunder, without affording Franchisee with any opportunity to cure such default, effective upon written notice to Franchisee, or automatically upon the occurrence of any of the following events: (a) if Franchisee Abandons Franchisee's obligations under this Agreement; (b) if Franchisee for four consecutive months, or any shorter period that indicates an intent by Franchisee to discontinue Franchisee's development of Shops within the Development Area; (c) if Franchisee becomes insolvent or is adjudicated bankrupt, or if any action is taken by Franchisee, or by others against the Franchisee, under any insolvency, bankruptcy or reorganization act, or if Franchisee makes an assignment for the benefit or creditors or a receiver is appointed by the Franchisee; (d) if Franchisee fails to meet its development obligations under the Development Schedule for any single Development Period including, but not limited to, Franchisee's failure to establish, open and/or maintain the cumulative number of Bang Cookies Shops in accordance with Development Schedule; and/or (e) in the event that any one Franchise Agreement is terminated respecting any Development Shop and/or any other Franchise Agreement between Franchisor and Franchisee.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 2

What actions related to insolvency or bankruptcy are considered grounds for automatic termination of the Bang Cookies Franchise Agreement?

Accepted Answer

Franchisor possesses the right, at Franchisor's option, to terminate this Agreement and all rights granted to Franchisee hereunder, without affording Franchisee with any opportunity to cure such default, effective upon written notice to Franchisee, or automatically upon the occurrence of any of the following events: (a) if Franchisee Abandons Franchisee's obligations under this Agreement; (b) if Franchisee for four consecutive months, or any shorter period that indicates an intent by Franchisee to discontinue Franchisee's development of Shops within the Development Area; (c) if Franchisee becomes insolvent or is adjudicated bankrupt, or if any action is taken by Franchisee, or by others against the Franchisee, under any insolvency, bankruptcy or reorganization act, or if Franchisee makes an assignment for the benefit or creditors or a receiver is appointed by the Franchisee; (d) if Franchisee fails to meet its development obligations under the Development Schedule for any single Development Period including, but not limited to, Franchisee's failure to establish, open and/or maintain the cumulative number of Bang Cookies Shops in accordance with Development Schedule; and/or (e) in the event that any one Franchise Agreement is terminated respecting any Development Shop and/or any other Franchise Agreement between Franchisor and Franchisee.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 3

What constitutes 'cause' for Bang Cookies to terminate the Multi-Unit Development Agreement?

Accepted Answer

ly if you and we mutually |
|  | without cause | applicable | agree, in writing, to terminate. |
| f. | Termination by franchisor with "cause" | 3.2 | We may terminate your Multi-Unit Development Agreement with cause. Your Multi-Unit Development Agreement can be terminated by us if: (a) you abandon your obligations under the Multi-Unit Development Agreement; (b) if you for four consecutive months, or any shorter period that indicates an intent by you to discontinue your development of Shops within the Development Area; (c) if you become insolvent or you are adjudicated bankrupt, or if any action is taken by you, or by others against you, under any insolvency, bankruptcy or reorganization act, or if you make an assignment for the benefit or creditors or a receiver is appointed by you; (d) if you fail to meet your development obligations under the Development Schedule for any single Development Period including, but not limited to, your failure to establish, open and/or maintain the cumulative number of Shops in accordance with Development Schedule; and/or (e) in the event that any one Franchise Agreement is terminated respecting any Shop and/or any other Franchise Agreement |
![](_page_47_Picture_0.jpeg)

| g | "Cause" defined-curable | Not | Not applicable. |
|----|----------------------------------------------------------------------------|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–49)

Question 4

What is the estimated total initial investment for a Bang Cookies satellite location?

Accepted Answer

![](_page_18_Picture_0.jpeg)

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 17–24)

Question 5

What principal obligations does a Bang Cookies franchisee have under the franchise and other agreements?

Accepted Answer

e Agreement; "DA"– Multi-Unit Development Agreement

|  | Articles in Agreement |  | Disclosure |
|---|---|---|---|
|  |  |  | Document Item |
|  |  |  |  |
| a. Site selection and acquisition/lease | FA: 2.A., 3.A. and 3.B. DA: 2, 5.5 and 5.6 | 7 and 11 |  |
| b. Pre-opening purchases and leases | FA: 3 and 8 DA: Not applicable | 7 and 8 |  |
| c. Site development and other pre- | FA: 3, 4, 7.F., 7.G., 7.I., 7.J., 8 and 9 | 6, 7 and 11 |  |
| opening requirements | DA: 2, 5.5 and 5.6 |  |  |
| d. Initial and ongoing training | FA: 4, 7.J., 14.C. and 14.D. DA: Not applicable | 11 |  |
| e. Opening | FA: 2, 3, 4 and 9.B. DA: 2, 3, 4.1, 4.4 and 4.5 | 11 |  |
| f. Fees | FA: 3, 4.A., 5, 9, 10, 12, 13, 14, 15, 16 and 18.N. DA: 4, 5.2 and 7.13 | 5, 6, and 7 |  |
| g. Compliance with standards and | FA: 3, 4, 5, 7, 8, 9, 11, 12 and 13 | 8 and 11 |  |
| policies/manual | DA: 2 and 5 |  |  |
| h. Trademarks and proprietary | FA: 6, 7 and 11 | 13 and 14 |  |
| information | DA: 2, 5 and 7.3 |  |  |
| i. Restrictions on products and services | FA: 3, 4.C. and 7 | 8, 11, and 16 |  |
| offered | DA: 2 and 5 |  |  |
| j. Warranty and customer service | FA: 7 | 16 |  |
| requirements | DA: Not applicable |  |  |
| k. Territorial development and sales | FA: 2 and 3 | 12 |  |
| quotas | DA: 4 |  |  |
| l. Ongoing product and service purchases | FA: 3, 4.C., 5 and 7 DA: Not applicable | 8 |  |
| m. Maintenance, appearance and | FA: 3 and 7 | 7 and 17 |  |
| remodeling requirements | DA: 5 |  |  |
| n. Insurance | FA: 8 DA: Not applicable | 7 and 8 |  |
| o. Advertising | FA: 3.F., 4.B., 7.I., 9 and 11 DA: Not applicable | 6 and 11 |  |
| p. Indemnification | FA: 10 and 11.E. DA: Not applicable | 6 |  |
| q. Owner’s participation, management, | FA: 4, 6 and 7 | 11 and 15 |  |
| and staffing | DA: 2.5 and 6.2 |  |  |
| r. Records and reports | FA: 5, 9, 12 and 13 DA: Not applicable | 6 |  |
| s. Inspections and audits | FA: 5, 7.K. and 13 DA: Not applicable | 6 and 11 |  |![](_page_28_Picture_0.jpeg)

| t. Transfer | FA: 14 DA: 6 | 17 |
|---|---|---|
| u. Renewal | FA: 15 DA: 3 | 17 |
| v. Post-termination obligations | FA: 6, 10, 11, 17 and 18 DA: Not applicable | 17 |
| w. Non-competition covenants | FA: 6, 17 and 18 DA: Not applicable | 17 |
| x. Dispute resolution | FA: 18.F. and 18.G. DA: 7 | 17 |
| y. Individual guarantee of franchisee obligations | FA: 2.C., 6, 7.J., 14.C., 14.D., 14.E. and 17.C. DA: 2.5 and 6.2 | 9 |

# **ITEM 10 FINANCING**

We do not offer direct or indirect financing. We do not guarantee your note, lease or other obligation.

Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 28–29)

Question 6

What is the total estimated initial investment range for a Bang Cookies bakery location?

Accepted Answer

# **YOUR ESTIMATED INITIAL INVESTMENT**

| Type of Expenditure | Amount | Method of Payment | When Due |
|---|---|---|---|
|  |  |  | To Whom Payment is Made |
|  |  |  |  |
| Development Area Fee (Note 1) | $70,000- $140,000 | Lump sum | When Franchise Agreement and Multi- Unit Development Agreement are signed |
| Estimated Initial Investment to Open One Shop (Bakery Location) (Note 2) | $403,870– $709,020 | Estimated Initial Invest

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 17–24)

Question 7

What are all the fees a Bang Cookies franchisee might pay to the franchisor, considering both Item 5 and Item 6?

Accepted Answer

- (11) Franchisee must pay a fixed sum of $15,000 to Franchisor (the "Transfer Fee");

Franchisor has sole discretion to apply any payments received from Franchisee or to offset any indebtedness of Franchisee to Franchisor to any past due indebtedness of Franchisee for Royalty Fees, Advertising Contributions, purchases from Franchisor or its affiliates, interest or any other indebtedness of Franchisee to Franchisor or its affiliates.

In exchange for the rights set forth and granted pursuant to the terms of this Agreement, upon execution of this Agreement, Franchisee shall pay to Franchisor a development area fee (the "Development Area Fee"). The Development Area Fee is not refundable.

The amount of the Development Area Fee is set forth in the Development Information Sheet.

Franchisee agrees that the Development Area Fee is not a franchise fee and, that at the time of signing each respective Franchise Agreement, Franchisee shall pay to Franchisor an initial franchise fee and all other fees in accordance with the terms and conditions of each respective Franchise Agreement, except that the initial franchise fee shall conform to the amounts set forth in Section 4.2 of this Agreement.

Question 8

How does the Bang Cookies's initial franchise fee (Item 5) compare to the construction and leasehold improvement costs in the estimated initial investment (Item 7)?

Accepted Answer

anchise Agreement – Bakery Location

| Type of Expenditure | Amount | Method of Payment | When Due |  |
|---|---|---|---|---|
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
| Initial Franchise Fee (Note 1) | $55,000 | Lump sum | When Franchise Agreement is signed | Us |
| Construction and Leasehold Improvements (Note 2) | $75,000 – $150,000 | As arranged | As incurred | Contractors, suppliers, and/or Landlord |
| Lease Deposits – Three Months | $15,000 – $40,000 | As arranged | As incurred | Landlord |
| (Note 3) |  |  |  |  |
| Furniture, Fixtures and Equipment | $176,370 – $224,020 | As arranged | As incurred | Suppliers |
| (Note 4) |  |  |  |  |
| Signage (Note 5) | $15,000 – $25,000 | As arranged | As incurred | Us, Suppliers |
| Computer, Software and Point of | $3,000 – $3,000 | As arranged | As incurred | Suppliers |
| Sales System (Note 6) |  |  |  |  |
| Grand Opening Marketing (Note 7) | $10,000 – $20,000 | As arranged | As incurred | Suppliers |
| Initial Inventory (Note 8) | $5,000 – $10,000 | As arranged | As incurred | Us, Suppliers |
| Utility Deposits (Note 9) | $1,500 – $2,000 | As arranged | As incurred | Suppliers |
| Insurance Deposits – Three | $500 – $1,000 | As arranged | As incurred | Insurers |
| Months (Note 10) |  |  |  |  |
| Travel for Initial Training | $3,500 – $7,500 | As arranged | As incurred | Airlines, hotels, |
| (Note 11) |  |  |  | restaurants |
| Professional Fees (Note 12) | $2,000 – $7,500 | As arranged | As incurred | Attorneys, accountants, architects, advisors |
| Technology Implementation Fee | $1,500 - $3,000 | As arranged | As incurred | Us |
| Licenses and Permits (Note 13) | $2,000 – $4,000 | As arranged | As incurred | Government |![](_page_17_Picture_0.jpeg)

| Additional Funds – Three Months (Note 14) | $40,000 – $70,000 | As arranged | As incurred | Us, employees, suppliers, landlord, utility suppliers |
|---|---|---|---|---|
| Total Estimate (Note 15) | $404,370– $712,020 |  |  |  |
B. Franchise Agreement – Satellite Location

| Type of Expenditure | Amount | Method of Payment | When Due |  |
|---|---|---|---|---|
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
| Initial Franchise Fee (Note 1) | $55,000 | Lump sum | When Franchise Agreement is signed | Us |
| Construction and Leasehold Improvements (Note 2) | $30,000 - $70,000 | As arranged | As incurred | Contractors, suppliers, and/or landlord |
| Architect & Engineering | $7,500 - $15,000 | As arranged | As incurred | Architect & Engineer |
| Lease Deposits and Rent – Three | $10,000 - $30,000 | As arranged | As incurred | Landlord |
| Months (Note 3) |  |  |  |  |
| Furniture, Fixtures and | $89,370 - $115,190 | As arranged | As incurred | Suppliers |
| Equipment (Note 4) |  |  |  |  |
| Signage (Note 6) | $5,000 – $18,500 | As arranged | As incurred | Suppliers |
| Computer, Software, and Point of | $2,000 – $2,000 | As arranged | As incurred | Suppliers |
| Sale System (Note 7) |  |  |  |  |
| Grand Opening Marketing (Note 8) | $5,000 – $10,000 | As arranged | As incurred | Suppliers |
| Initial Inventory (Note 9) | $3,000 - $5,000 | As arranged | As incurred | Us, suppliers |
| Utility Deposits (Note 10) | $700 – $1,500 | As arranged | As incurred | Suppliers |
| Insurance Deposits – Three | $500 – $1,000 | As arranged | As incurred | Insurers |
| Months (Note 11) |  |  |  |  |
| Travel for Initial Training (Note 12) | $3,500 – $7,500 | As arranged | As incurred | Airlines, hotels, restaurants |
| Professional Fees (Note 13) | $1,000 – $4,000 | As arranged | As incurred | Attorneys, accountants, archite

Question 9

What is the range of the estimated initial investment for a Bang Cookies franchise (Item 7), and what factors influence the variation in construction and leasehold improvement costs?

Accepted Answer

| Type of Expenditure | Amount | Method of Payment | When Due |
|---|---|---|---|
|  |  |  | To Whom Payment is Made |
|  |  |  |  |
| Development Area Fee (Note 1) | $70,000- $140,000 | Lump sum | When Franchise Agreement and Multi- Unit Development Agreement are signed |
| Estimated Initial Investment to Open One Shop (Bakery Location) (Note 2) | $403,870– $709,020 | Estimated Initial Investment is based on estimate contained in Chart A, above, of this Item 7, for a Franchise Agreement. See, Chart A |  |
|  |  |  |  |
|  |  |  |  |

| Type of Expenditure | Amount | Method of Payment | When Due |  |
|---|---|---|---|---|
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
| Initial Franchise Fee (Note 1) | $55,000 | Lump sum | When Franchise Agreement is signed | Us |
| Construction and Leasehold Improvements (Note 2) | $75,000 – $150,000 | As arranged | As incurred | Contractors, suppliers, and/or Landlord |
| Lease Deposits – Three Months | $15,000 – $40,000 | As arranged | As incurred | Landlord |
| (Note 3) |  |  |  |  |

| Type of Expenditure | Amount | Method of Payment | When Due |  |
|---|---|---|---|---| 
| Initial Franchise Fee (Note 1) | $55,000 | Lump sum | When Franchise Agreement is signed | Us |
| Construction and Leasehold Improvements (Note 2) | $30,000 - $70,000 | As arranged | As incurred | Contractors, suppliers, and/or landlord |

We have based these estimates on the experiences of our affiliate in developing a Bang Cookies Shop. These are only estimates and your costs and, the range of those costs, may vary. Factors that may influence your costs include: the size of your Shop; local geographic market and economic conditions including rent, labor, and construction rates; local licensing costs; competition; the facilities and existing build-out of the Shop Location that you select; landlord funded tenant improvements and allowances; the capabilities of your management team; and the level of sales achieved by your Shop.

Note 2: Construction and Leasehold Improvements – This estimate is for the cost of construction, construction management and build-out of Bang Cookies Shop but does not including furniture, fixtures and equipment. Our estimates are based on the assumption that a Shop developed as a Bakery Location must possess a minimum square footage of 1,800 to 3,000 square feet and that a Shop developed as a Satellite Location must possess a minimum square footage of 275 to 850 square feet. Satellite locations will be supported by a Bakery Location for the primary and daily baking and production of all homemade cookies, cakes, and menu items. These estimates are based on the assumption that the location that you select for your Shop is a site delivered to you at a pre-existing stage where existing interior improvements consist of installed and functional heating/cooling with delivery systems, essential lighting, electrical switches and outlets, lavatories, a finished ceiling, walls prepared for painting and a concrete slab floor. This estimate does not include architectural fees or other fees charged by licensed professionals other than general contractors and licensed tradesmen and do not include any special heating cooling or ductwork required by a shop. The costs for developing your Shop may be higher or lower than the estimates provided.

Question 10

What is the relationship between the initial franchise fee for a Bang Cookies franchise (Item 5) and the estimated total initial investment (Item 7)?

Accepted Answer

anchise Agreement – Bakery Location

| Type of Expenditure | Amount | Method of Payment | When Due |  |
|---|---|---|---|---|
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
| Initial Franchise Fee (Note 1) | $55,000 | Lump sum | When Franchise Agreement is signed | Us |
| Construction and Leasehold Improvements (Note 2) | $75,000 – $150,000 | As arranged | As incurred | Contractors, suppliers, and/or Landlord |
| Lease Deposits – Three Months | $15,000 – $40,000 | As arranged | As incurred | Landlord |
| (Note 3) |  |  |  |  |
| Furniture, Fixtures and Equipment | $176,370 – $224,020 | As arranged | As incurred | Suppliers |
| (Note 4) |  |  |  |  |
| Signage (Note 5) | $15,000 – $25,000 | As arranged | As incurred | Us, Suppliers |
| Computer, Software and Point of | $3,000 – $3,000 | As arranged | As incurred | Suppliers |
| Sales System (Note 6) |  |  |  |  |
| Grand Opening Marketing (Note 7) | $10,000 – $20,000 | As arranged | As incurred | Suppliers |
| Initial Inventory (Note 8) | $5,000 – $10,000 | As arranged | As incurred | Us, Suppliers |
| Utility Deposits (Note 9) | $1,500 – $2,000 | As arranged | As incurred | Suppliers |
| Insurance Deposits – Three | $500 – $1,000 | As arranged | As incurred | Insurers |
| Months (Note 10) |  |  |  |  |
| Travel for Initial Training | $3,500 – $7,500 | As arranged | As incurred | Airlines, hotels, |
| (Note 11) |  |  |  | restaurants |
| Professional Fees (Note 12) | $2,000 – $7,500 | As arranged | As incurred | Attorneys, accountants, architects, advisors |
| Technology Implementation Fee | $1,500 - $3,000 | As arranged | As incurred | Us |
| Licenses and Permits (Note 13) | $2,000 – $4,000 | As arranged | As incurred | Government |![](_page_17_Picture_0.jpeg)

| Additional Funds – Three Months (Note 14) | $40,000 – $70,000 | As arranged | As incurred | Us, employees, suppliers, landlord, utility suppliers |
|---|---|---|---|---|
| Total Estimate (Note 15) | $404,370– $712,020 |  |  |  |
B.

Question 11

What is the total estimated initial investment for a Bang Cookies franchise (Item 7), and how much of that is the non-refundable initial franchise fee (Item 5)?

Accepted Answer

# **YOUR ESTIMATED INITIAL INVESTMENT**

| Type of Expenditure | Amount | Method of Payment | When Due |
|---|---|---|---|
|  |  |  | To Whom Payment is Made |
|  |  |  |  |
| Development Area Fee (Note 1) | $70,000- $140,000 | Lump sum | When Franchise Agreement and Multi- Unit Development Agreement are signed |
| Estimated Initial Investment to Open One Shop (Bakery Location) (Note 2) | $403,870– $709,020 | Estimated Initial Investment is based on estimate contained in Chart A, above, of this Item 7, for a Franchise Agreement. See, Chart A |  |
|  |  |  |  |
|  |  |  |  |
# Explanatory Notes to Item 7 For a Franchise Agreement and a Multi-Unit Development Agreement

Note 1: Development Area Fee and Franchise Fees – When you sign a Multi-Unit Development Agreement you must also sign a Franchise Agreement for the first Shop that you will be required to develop under your Multi-Unit Development Agreement.

Question 12

What types of businesses will a Bang Cookies franchise compete with?

Accepted Answer

The shop industry is extremely competitive. You will be competing with numerous businesses that sell, offer and provide cookies and baked goods. You will be competing with many local businesses that are independently owned or part of regional or national franchise chain. These competing businesses will include businesses that sell, offer and provide cookies, brownies, and other baked goods. The market for the products and services sold by the Franchised Business is not seasonal and is very highly competitive.

Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 8–11)

Question 13

When is Bang Cookies Franchise LLC required to furnish a New York prospectus to a prospective franchisee?

Accepted Answer

- 4. There are circumstances in which an offering made by Bang Cookies Franchise LLC would not fall within the scope of the New York General Business Law, Article 33, such as when the offer and acceptance occurred outside the State of New York. However, an offer or sale is deemed made in New York if you are domiciled in New York or the Outlet will be opening in New York. Bang Cookies Franchise LLC is required to furnish a New York prospectus to every prospective franchisee who is protected under the New York General Business Law, Article 33.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 14

When must a qualified veteran request the Bang Cookies initial franchise fee discount, and what documentation is required?

Accepted Answer

For qualified individuals who were honorably discharged from any branch of the United States Military the Initial Franchise Fee for the first / initial Operating Territory franchise is discounted by 10%. This discount must be requested at the time of your initial franchise application and requires documented military service.

Source: Item 5 — INITIAL FEES (FDD pages 11–13)

Question 15

According to the amendment, what rights and causes of action remain in force for the Bang Cookies franchisee under Minnesota law regarding transfer approval?

Accepted Answer

1.Article 14.C of the Franchise Agreement, under the heading "Conditions for Approval of Transfer," subarticle 14.C(6) is supplemented with the addition of the following language:

; provided, however, that all rights enjoyed by Franchisee and any causes of action arising in Franchisee's favor from the provisions of the Minnesota Franchise Act, Minn. Stat. Section 80C.14 et seq. and Minnesota Rules 2860.4400(D), shall remain in force; it being the intent of this provision that the non-waiver provisions of the Minnesota Rules 2860.4400(D) be satisfied; and

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 16

According to the amendment, what rights and causes of action remain in force for the Bang Cookies franchisee under Minnesota law regarding renewal conditions?

Accepted Answer

2. Article 15.B of the Franchise Agreement, under the heading "Conditions for Renewal," sub article 15.B(8) is supplemented with the addition of the following language:

; provided, however, that all rights enjoyed by Franchisee and any causes of action arising in Franchisee's favor from the provisions of the Minnesota Franchise Act, Minn. Stat. Section 80C.14 et seq. and Minnesota Rules 2860.4400(D), shall remain in force; it being the intent of this provision that the non-waiver provisions of the Minnesota Rules 2860.4400(D) be satisfied; and

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 17

According to the Bang Cookies Franchise Agreement, can Bang Cookies change the designated 'Accounting Period'?

Accepted Answer

"**Accounting Period**" refers to and means the period of time selected and determined by Franchisor for the required measurement and reporting of financial information and payment of financial obligations by Franchisee. The applicable measurement period will be determined by Franchisor from time to time with respect to Franchisee's obligations to report financial information and data to Franchisor and Franchisee's payment of all fees and other obligations under this Agreement. The respective "Accounting Period" shall be those Franchisor designated times, whether, weekly, monthly, or otherwise, as designated by Franchisor, with all such Accounting Periods automatically commencing on the earlier of the (a) Scheduled Business Commencement Date, or (b) the Actual Business Commencement Date of the Franchised Business and, continuing, throughout the Term of this Agreement. Unless otherwise designated by Franchisor at any time, unless otherwise specified in this Agreement, the Accounting Period shall be a weekly period for each and every week throughout the Term of this Agreement.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 18

According to the Bang Cookies franchise agreement, what happens if the franchisee has selected a proposed shop location that the franchisor approves as the franchisee's shop location as of the effective date?

Accepted Answer

- (3) If, as of the Effective Date, Franchisee has selected a proposed Shop Location that Franchisor approves as Franchisee's Shop Location, then Franchisee's Shop Location and Designated Territory, if any, shall be identified in Schedule 1 of this Agreement. To be effective, Schedule 1 must be completed and signed by Franchisor. Franchisee's execution of Schedule 1 with a specific

![](_page_97_Picture_0.jpeg)

location for Franchisee's Shop Location shall constitute Franchisee's obligation to develop and operate the Franchised Business at the designated Franchisee Shop Location;

- (4) If, as of the Effective Date, Franchisee has not selected a proposed Shop Location, and/or has not obtained Franchisor's approval of the proposed Shop Location, and/or Schedule 1 to this Agreement is left incomplete or is not signed by Franchisor, Franchisee must locate, identify and secure a Shop Location for the Franchised Business in accordance with the terms of this Agreement, including the requirement that Franchisee must obtain Franchisor's approval of Franchisee's Shop Location.

If, after the Effective Date, Franchisee proposes and Franchisor approves of Franchisee's proposed Shop Location, such approval must be in writing and must be evidenced by Franchisor's execution of Schedule 1 with a specific Shop Location designated and identified in Schedule 1.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 19

According to the Bang Cookies Franchise Agreement, what happens if the 'Scheduled Business Commencement Date' and the 'Actual Business Commencement Date' are different?

Accepted Answer

"**Accounting Period**" refers to and means the period of time selected and determined by Franchisor for the required measurement and reporting of financial information and payment of financial obligations by Franchisee. The applicable measurement period will be determined by Franchisor from time to time with respect to Franchisee's obligations to report financial information and data to Franchisor and Franchisee's payment of all fees and other obligations under this Agreement. The respective "Accounting Period" shall be those Franchisor designated times, whether, weekly, monthly, or otherwise, as designated by Franchisor, with all such Accounting Periods automatically commencing on the earlier of the (a) Scheduled Business Commencement Date, or (b) the Actual Business Commencement Date of the Franchised Business and, continuing, throughout the Term of this Agreement. Unless otherwise designated by Franchisor at any time, unless otherwise specified in this Agreement, the Accounting Period shall be a weekly period for each and every week throughout the Term of this Agreement.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 20

According to the Bang Cookies Franchise Agreement, what is the relationship between the 'Scheduled Business Commencement Date' and the 'Actual Business Commencement Date'?

Accepted Answer

onsideration of the foregoing recitals and other good and valuable consideration, the receipt and sufficiency of which is hereby mutually acknowledged, the parties do hereby agree, as follows:

# **ARTICLE 1 DEFINITIONS**

Supplementing the terms and definitions contained in the foregoing "Recitals":

"**Accounting Period**" refers to and means the period of time selected and determined by Franchisor for the required measurement and reporting of financial information and payment of financial obligations by Franchisee. The applicable measurement period will be determined by Franchisor from time to time with respect to Franchisee's obligations to report financial information and data to Franchisor and Franchisee's payment of all fees and other obligations under this Agreement. The respective "Accounting Period" shall be those Franchisor designated times, whether, weekly, monthly, or otherwise, as designated by Franchisor, with all such Accounting Periods automatically commencing on the earlier of the (a) Scheduled Business Commencement Date, or (b) the Actual Business Commencement Date of the Franchised Business and, continuing, throughout the Term of this Agreement.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 21

What agreement's default can trigger the Assignee's right to take possession of the Leased Premises for a Bang Cookies franchise?

Accepted Answer

Assignee has the right and possesses full power and authority to take possession of the Leased Premises, to eject and expel Assignor from possession and occupancy of the Leased Premises and to terminate Assignor's right, title and interest in and to the Lease in the event of: (a) a default by Assignor under the terms of the Lease and Assignor's failure to timely cure such default, assuming that such default is capable of curing; (b) a default by Assignor (in Assignor's capacity as a Bang Cookies Shop franchisee) under the terms and conditions of the Bang Cookies Shop Franchise Agreement between Assignor, as franchisee, and Assignee, as franchisor (the "Franchise Agreement"), and Assignor's failure to timely cure such default, assuming that such default is capable of curing; (c) upon default of any agreement supporting or guaranteeing the Franchise Agreement; or (d) the expiration or termination of the Franchise Agreement.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 22

Does Bang Cookies have to approve the establishment of Satellite Locations?

Accepted Answer

and operate additional Bang Cookie Shops located within a close geographic range to your Bakery Location, up to two additional Shops, depending on the production capacity of your Bakery Location may, if approved by us, be established as satellite locations (each, a "Satellite Location") each, with a smaller kitchen, preparation, and baking area that is limited to baking cookies and other baked goods that are baked from dough and other baking items that are partially prepared at your Location and delivered to your Satellite Location. A Bakery Location must be located at a retail location comprising approximately 1,500 to 2,500 square feet with approximately 600 to 700 square feet dedicated to your kitchen and baking facilities. A Satellite Location must be located at a retail location comprising approximately 800 to 1,000 square feet with approximately 600 to 800 square feet dedicated to your limited kitchen preparation and baking facilities.

Whether or not a Shop qualifies as a Bakery Location and the type, number, and location of Satellite Locations that a Bakery Location may support, requires our written approval. If you are granted the right to establish multiple Shops, there is no obligation to establish your additional Shops as Satellite Locations. Unless you sign a multi-unit development agreement, there is no guarantee that we may approve or award you the right to enter into any additional Franchise Agreements. You must assume that every Shop Location that you establish (subject to our Franchise Agreement and, if applicable, multi-unit development agreement) must be established as a Bakery Location unless we, in writing, otherwise approve of a Shop qualifying as a Satellite Location. Unless otherwise noted, the disclosures contained in this Disclosure Document apply whether or not your Shop qualifies as a Bakery Location or Satellite Location.

Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 8–11)

Question 23

Does Bang Cookies have to approve the type, number, and location of Satellite Locations?

Accepted Answer

and operate additional Bang Cookie Shops located within a close geographic range to your Bakery Location, up to two additional Shops, depending on the production capacity of your Bakery Location may, if approved by us, be established as satellite locations (each, a "Satellite Location") each, with a smaller kitchen, preparation, and baking area that is limited to baking cookies and other baked goods that are baked from dough and other baking items that are partially prepared at your Location and delivered to your Satellite Location. A Bakery Location must be located at a retail location comprising approximately 1,500 to 2,500 square feet with approximately 600 to 700 square feet dedicated to your kitchen and baking facilities. A Satellite Location must be located at a retail location comprising approximately 800 to 1,000 square feet with approximately 600 to 800 square feet dedicated to your limited kitchen preparation and baking facilities.

Whether or not a Shop qualifies as a Bakery Location and the type, number, and location of Satellite Locations that a Bakery Location may support, requires our written approval. If you are granted the right to establish multiple Shops, there is no obligation to establish your additional Shops as Satellite Locations. Unless you sign a multi-unit development agreement, there is no guarantee that we may approve or award you the right to enter into any additional Franchise Agreements. You must assume that every Shop Location that you establish (subject to our Franchise Agreement and, if applicable, multi-unit development agreement) must be established as a Bakery Location unless we, in writing, otherwise approve of a Shop qualifying as a Satellite Location. Unless otherwise noted, the disclosures contained in this Disclosure Document apply whether or not your Shop qualifies as a Bakery Location or Satellite Location.

Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 8–11)

Question 24

Does Bang Cookies have to approve whether a shop qualifies as a Bakery Location?

Accepted Answer

Whether or not a Shop qualifies as a Bakery Location and the type, number, and location of Satellite Locations that a Bakery Location may support, requires our written approval. If you are granted the right to establish multiple Shops, there is no obligation to establish your additional Shops as Satellite Locations. Unless you sign a multi-unit development agreement, there is no guarantee that we may approve or award you the right to enter into any additional Franchise Agreements. You must assume that every Shop Location that you establish (subject to our Franchise Agreement and, if applicable, multi-unit development agreement) must be established as a Bakery Location unless we, in writing, otherwise approve of a Shop qualifying as a Satellite Location. Unless otherwise noted, the disclosures contained in this Disclosure Document apply whether or not your Shop qualifies as a Bakery Location or Satellite Location.

Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 8–11)

Question 25

Can the 'Approved Services and Products' for a Bang Cookies franchise be changed or modified, and by whom?

Accepted Answer

"**Approved Services and Products**" shall have the meaning defined in the "Recitals" section of this Agreement and shall further refer to and mean those products and services that we authorize for sale by Bang Cookies Shops. We shall exclusively designate and determine the Approved Services and Products and we, in our Reasonable Business Judgment, may change, modify, reduce or supplement the Approved Services and Products that must be offered and sold by the Franchised Business and those products and services that may not be sold by the Franchised Business. The operations manual, subject to changes that we may make from time to time and our right to change and modify the Approved Services and Products, shall designate the Approved Services and Products that must be offered and sold by the Franchised Business. The Franchised Business may only offer and sell the Approved Services and Products.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 26

Is attendance at the Bang Cookies annual conference required, and what happens if a franchisee does not attend?

Accepted Answer

m local marketing requirements.

Note 8: Annual Conference Attendance Fee – If we offer a franchisee annual conference in a given year you will be required to attend the conference on the dates and at the location that we designate. You will be responsible for all travel and lodging expenses. We may charge you an annual conference fee in an amount not exceeding \$1,500. We reserve the right to charge the annual conference fee to those franchisees that do

![](_page_16_Picture_0.jpeg)

not attend. We will not require your attendance at an annual conference for more than thre

Source: Item 6 — OTHER FEES (FDD pages 13–17)

Question 27

Can Bang Cookies change the designated 'Accounting Period' according to the Franchise Agreement?

Accepted Answer

"**Accounting Period**" refers to and means the period of time selected and determined by Franchisor for the required measurement and reporting of financial information and payment of financial obligations by Franchisee. The applicable measurement period will be determined by Franchisor from time to time with respect to Franchisee's obligations to report financial information and data to Franchisor and Franchisee's payment of all fees and other obligations under this Agreement. The respective "Accounting Period" shall be those Franchisor designated times, whether, weekly, monthly, or otherwise, as designated by Franchisor, with all such Accounting Periods automatically commencing on the earlier of the (a) Scheduled Business Commencement Date, or (b) the Actual Business Commencement Date of the Franchised Business and, continuing, throughout the Term of this Agreement. Unless otherwise designated by Franchisor at any time, unless otherwise specified in this Agreement, the Accounting Period shall be a weekly period for each and every week throughout the Term of this Agreement.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 28

Can Bang Cookies change the required local marketing spend of 2% of gross sales?

Accepted Answer

On an on-going calendar year quarterly basis, you must spend not less than 2% of your quarterly Gross Sales on the local marketing of your Shop.

We will review your local marketing programs and notify you if we approve same.

We will make available to you and provide you with access, in the form of a source document, to our approved marketing campaigns, media, and messaging that may be used by you.

In those instances where we provide you with access to our marketing campaigns, we provide you with the source designs, copy, and design specifications.

However, you will incur the direct costs associated with customizing, duplicating and using such marketing campaigns and in having them printed, distributed and/or placed with media sources. (Franchise Agreement, Article 9);

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 29–36)

Question 29

Can Bang Cookies change the royalty fee during a renewal term?

Accepted Answer

Throughout the Term of this Agreement, Franchisee shall pay to Franchisor a continuing weekly nonrefundable royalty fee (the "Royalty Fee") in an amount equal to 6% (the "Royalty Rate") of Franchisee's weekly Gross Sales. The Royalty Fee shall be calculated on a weekly basis for each respective weekly

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Accounting Period. The Royalty Fee during any Renewal Term shall be determined by Franchisor but shall not be less than the Royalty Fee and Royalty Rate set forth in this Agreement.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 30

What is the condition for the Bang Cookies Brand Development Fund to pay for Franchisor's personnel salary expenses?

Accepted Answer

- (5) Franchisee agrees that the Brand Development Fund may be used to pay various costs and expenses of Franchisor for such reasonable salaries, wages, administrative costs and overhead as Franchisor may incur in activities reasonably related to the administration, activities and/or the brand awareness goals of the Brand Development Fund including expenses incurred by Franchisor for advertising, marketing, product and service testing, product and service development, maintenance, evaluation and monitoring of the Business Management Systems, upgrades to the System Website, development of Digital Media and creative development that is internally administered or prepared by Franchisor and other marketing activities made by Franchisor, provided, however, that salary expenses for Franchisor's personnel paid by the Brand Development Fund shall be commensurate with the amount of that time spent by such personnel on Brand Development Fund matters.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 31

What condition must be met to qualify for the veteran's discount on the Bang Cookies initial franchise fee?

Accepted Answer

For qualified individuals who were honorably discharged from any branch of the United States Military the Initial Franchise Fee for the first / initial Operating Territory franchise is discounted by 10%. This discount must be requested at the time of your initial franchise application and requires documented military service.

Source: Item 5 — INITIAL FEES (FDD pages 11–13)

Question 32

What condition must be met for the Schedule A of the Bang Cookies Multi-Unit Development Agreement to be effective?

Accepted Answer

The Development Information Sheet is attached as Schedule A to this Agreement and is incorporated into and made a part of this Agreement. To be effective the Development Information Sheet must be completed and signed by Franchisor.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 33

What are the conditions that affect a Bang Cookies franchisee's right to develop additional shops under a Multi-Unit Development Agreement?

Accepted Answer

You do not have the right to establish additional Shops unless you sign a Multi-Unit Development Agreement. If we enter into and sign a Multi-Unit Development Agreement you will have the right to develop a mutually-agreed upon number of additional Shops within a specified Development Area. The size of your Development Area will vary significantly from other franchisees and your right to develop additional Shops under a Multi-Unit Development Agreement will be subject to your timely compliance with the agreed upon development schedule, your compliance with the terms of your Multi-Unit Development Agreement, and your compliance with all other agreements with us and our affiliates, including all Franchise Agreements. Our approval of future Shop Locations and their respective designated territories will be based on our then current site and territory criteria.

Source: Item 12 — TERRITORY (FDD pages 36–38)

Question 34

What is the consequence if a Bang Cookies franchisee fails to maintain the confidentiality of the Manuals?

Accepted Answer

- (i) Franchisee discloses, divulges, provides access to, communicates, and/or permits the communication of the contents, data and/or information contained in the operations manual to any third party not otherwise authorized by Franchisor;

- (j) Franchisee discloses, divulges, provides access to, communicates, and/or permits the communication of Confidential Information to any third party not otherwise authorized by Franchisor;

- (k) Franchisee engages in any activity that injures, harms, damages, or otherwise has a material adverse effect on Franchisor, the System, the Licensed Marks, Bang Cookies Shops, Franchisee's Shop, and/or the reputation of the Bang Cookies brand;

- (p) Franchisee fails, upon receiving actual or constructive notice, shall: (1) immediately notify Franchisor of any known breach of the Confidentiality Agreement by any person or entity; (2) immediately notify Franchisor of facts and information that would cause a reasonable person

Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD pages 39–40)

Question 35

What is the consequence if a Bang Cookies franchisee uses the Business Management System for purposes other than the exclusive benefit of the Franchised Business?

Accepted Answer

Supplementing the foregoing, Franchisee agrees that the Business Management System will contain proprietary and confidential information owned by Franchisor and related to the System, and that:

- (1) Franchisee shall use the Business Management System and the Business Management System Data for the exclusive benefit of the Franchised Business and in accordance with the terms of this Agreement and Franchisor's standards and specifications as set forth in the operations manual;
- (2) All rights in and to the Business Management System are non-transferable and non-assignable to Franchisee and shall be utilized by Franchisee subject to the terms and conditions of this Agreement, Business Management System licenses that Franchisor may approve of and otherwise as determined by Franchisor in Franchisor's Reasonable Business Judgment;
- (3) As between Franchisee and Franchisor, Franchisor is and shall be the exclusive owner of the Business Management System Data, except that Franchisee shall store and maintain such data in accordance with all applicable local, state and federal privacy, data collection and solicitation laws. Among other things, upon expiration or termination of this Agreement for any reason, Franchisee shall preserve and maintain the Business Management System data for the purpose of transferring such data to Franchisor;
- (4) At all times, Franchisee shall provide and permit Franchisor to maintain direct and independent access to the Business Management System and Franchisee shall electronically transfer and transmit to Franchisor all Business Management System Data;
- (5) When instructed by Franchisor, Franchisee shall upgrade, replace and modify the Business Management System;
- (6) Franchisee shall promptly disclose to Franchisor all ideas and suggestions for modifications or enhancements to the Business Management System, to the configuration and templates associated with the Business Management System and that Franchisor shall have the right to use such ideas and suggestions and that Franchisee shall not receive or obtain any ownership rights or interests in any modifications or enhancements to the Business Management Software;
- (7) Other than permitting access to employees of the Franchised Business for the purpose of conducting the authorized operations of the Franchised Business, Franchisee shall not permit nor allow any third party to access, utilize or duplicate the Business Management System or the Business Management System Data without Franchisor's prior written consent;
- (8) Franchisee shall keep and maintain the Business Management System and the Business Management System Data as secret and confidential and Franchisee shall maintain security precautions to maintain the confidentiality and secrecy of the Business Management System Data and to prevent the unauthorized access or use; and

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 36

What is the dependency regarding modifying or discontinuing use of materials for a Bang Cookies franchise?

Accepted Answer

hout limitation as to any other Article or provision of this Agreement, upon expiration or termination of this Agreement for any reason, Franchisee shall immediately pay to Franchisor all sums and fees due from Franchisee to Franchisor under the terms of this Agreement including, but not limited to Royalty Fees and Advertising Contributions and all other sums and fees due from Franchisee to Franchisor and/or Franchisor affiliates and/or suppliers for products and services including, but not limited to, System Supplies.

#### **17.B. CEASE OPERATIONS AND PROTECTION OF THE SYSTEM**

Upon expiration, termination, or Transfer of this Agreement for any reason, Franchisee shall immediately:

- (1) Permanently cease to be a franchise owner of the Shop that was the subject of this Agreement and cease to operate such Shop under the System;
- (2) Refrain from directly or indirectly, holding oneself/itself out to any person or entity, or represent themselves/itself as a present or former Bang Cookies franchisee;
- (3) Permanently cease to use, in any manner: (a) the System including, without limitation, the Confidential Information, the Licensed Marks, the Business Management System Data, and the operations manual; (b) any methods, procedures, or techniques associated with the System in which Franchisor possesses proprietary rights or constitute Franchisor's trade secrets; (c) System Supplies, including communicating with or ordering products from Franchisor's designated suppliers and vendors of System Supplies; (d) the Approved Services and Products; and (e) any other advertising, marketing, media, and any other information, documents or things associated with Franchisor, the System, the Licensed Marks, Bang Cookies Shops, the Franchised Business, and Franchisee's former Bang Cookies Shop, including, without limitation, any confidential, proprietary methods, procedures, descriptions of products, techniques, trade secrets, proprietary marks, distinctive forms, slogans, symbols, signs, stationary, advertising material, articles, logos, devices, items and all other things, tangible or intangible, associated with Franchisor, the System,

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the Licensed Marks, and Bang Cookies Shops;

Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD pages 39–40)

Question 37

What is the dependency between the Renewal Notice and compliance with the Bang Cookies franchise agreement?

Accepted Answer

- (4) Franchisee must update and/or agree to update the condition, appearance and functionality of Franchisee's Shop Facility and Franchisee's Shop Location and to otherwise modify Franchisee's Shop Facility and Franchisee's Shop Location in compliance with Franchisor's specifications and standards then applicable for new Bang Cookies Shops;

- (5) Franchisee pays the Renewal Fee and Franchisee agrees to, signs, and delivers to Franchisor, within 30 days of the date of delivery by Franchisor to Franchisee, Franchisor's then current form Shop Franchise Agreement for the Renewal Term (the "Renewal Franchise Agreement");

- (6) Franchisee's Owners and their Spouses, respectively, must agree to, sign, and deliver to Franchisor, within 30 days of the date of delivery by Franchisor to Franchisee, Franchisor's then current individual guaranty agreements, and, thereby, among other things, individually and jointly guarantee the full and complete performance of the Renewal Franchise Agreement including, but not limited to, payment obligations, non-compete obligations, and restrictive covenants (the "Renewal Ancillary Agreements");

- (7) Franchisee and the Owners must, prior to the Renewal Term, undertake and complete, to Franchisor's satisfaction, such additional training, if any, as designated and determined by Franchisor in Franchisor's Reasonable Business Judgment; and

- (8) Franchisee and the Owners must agree to, sign, and deliver to Franchisor, within 30 days of the date of delivery by Franchisor to Franchisee, Franchisor's then current form of general release whereby Franchisee and Franchisee's Owners shall each fully release and discharge Franchisor, Franchisor's affiliates and it's officers, directors, shareholders, partners, agents, representatives, independent contractors, servants, employees, successors and assigns from any and all claims, causes of action, and suits arising from and/or related to this Agreement.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 38

What is the dependency between the transfer of a Bang Cookies shop and the obligation to modify the shop's appearance after termination?

Accepted Answer

- (8) Unless Franchisee has met the requirements of Article 3.E. within the five year period immediately preceding the Transfer, the transferee, at its expense, must improve, modify, refurbish, renovate, remodel, and/or otherwise upgrade Franchisee's Bang Cookies Shop Facility to conform to the then current standards and specifications of Franchisor, and the transferee must complete such improvements, modifications, refurbishments, renovations, remodeling, and/or upgrading within the time period Franchisor reasonably specifies;

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 39

Is the Bang Cookies Development Agreement always required to be signed in addition to the Franchise Agreement?

Accepted Answer

tions requiring prospective franchisees to assent to a release, estoppel or waiver of liability are not intended to nor shall they act as a release, estoppel or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law.

IN WITNESS WHEREOF, the parties have duly executed and delivered this Maryland amendment to the Bang Cookies Franchise LLC Franchise Agreement and, if applicable, the Development Agreement on the same date as the Franchise Agreement and Development Agreement were, respectively, executed.

| Franchisor: Bang Cookies Franchise LLC Franchisee: |                     |  |
|----------------------------------------------------------|---------------------|--|
| Signature | Signature |  |
| Name and Title (please print) | Name (please print) |  |
| Dated | Dated Signature Name (please print) Dated |  |
|  |  |  |
![](_page_232_Picture_0.jpeg)

#### **MINNESOTA FRANCHISE AND DEVELOPMENT AGREEMENT AMENDMENT**

#### Amendments to the Bang Cookies Franchise Agreement

In recognition of the requirements of the Minnesota Statutes, Chapter 80C. and Minnesota Franchise Rules, Chapter 2860, the parties to the attached Bang Cookies Franchise LLC Franchise Agreement (the "Franchise Agreement") and, if Franchisor and Franchisee both sign the Bang Cookies Franchise LLC Multi-Unit Development Agreement (the "Development Agreement"), as follows:

1.Article 14.C of the Franchise Agreement, under the heading "Conditions for Approval of Transfer," subarticle 14.C(6) is supplemented with the addition of the following language:

; provided, however, that all rights enjoyed by Franchisee and any causes of action arising in Franchisee's favor from the provisions of the Minnesota Franchise Act, Minn. Stat. Section 80C.14 et seq.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 40

What is the 'Due Date' referring to for the Bang Cookies Brand Development Fund Fee?

Accepted Answer

- (1) If Franchisor institutes the Brand Development Fund, Franchisee shall pay, on the Due Date, a mandatory and continuing fee to the Brand Development Fund in an amount equal to a percentage of Gross Sales (as determined and designated by Franchisor in Franchisor's Reasonable Business Judgment) for each weekly Accounting Period (the "Brand Development Fund Fee"), provided, however, Franchisee will not be required to contribute more than 2% of the Gross Sales of the Franchised Business for each weekly Accounting Period;

- (2) Franchisor will provide Franchisee with written notice of the percentage of Gross Sales that Franchisee is required to contribute to the Brand Development Fund.

Upon such written notice to Franchisee, the percentage of Gross Sales to be paid by Franchisee to the Brand Development Fund will be applicable for each and every weekly Accounting Period thereafter during the Term until otherwise designated by Franchisor in writing.

The Brand Development Fund Fee shall be paid to Franchisor on the Due Date and in accordance with the payment terms and method set forth in Article 5.B. for the payment of Royalty Fees;

- (3) Franchisor, in Franchisor's Reasonable Business Judgment, shall direct all advertising, media placement, marketing and public relations programs and activities financed by the Brand Development Fund, with sole discretion over the strategic direction, creative concepts, materials, and endorsements used by the Brand Development Fund, and the geographic, market, and media placement and allocation thereof.

Without limiting the foregoing, the Brand Development Fund may also be utilized for evaluation and monitoring of the Business Management Systems, maintenance and upgrades to the System Website, and development of Digital Media;

- (4) Franchisee agrees that the purpose of the advertising, media, marketing and activities financed by the Brand Development Fund is and shall be for the general enhancement of the System brand as associated with the Licensed Marks and general public brand recognition and awareness of the Licensed Marks.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 41

What is the effect of the 'foregoing recitals' on the agreement between Bang Cookies and the Franchisee, according to the Franchise Agreement?

Accepted Answer

NOW THEREFORE, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and sufficiency of which is hereby mutually acknowledged, the parties do hereby agree, as follows:

# **ARTICLE 1 DEFINITIONS**

Supplementing the terms and definitions contained in the foregoing "Recitals":

"**Accounting Period**" refers to and means the period of time selected and determined by Franchisor for the required measurement and reporting of financial information and payment of financial obligations by Franchisee. The applicable measurement period will be determined by Franchisor from time to time with respect to Franchisee's obligations to report financial information and data to Franchisor and Franchisee's payment of all fees and other obligations under this Agreement. The respective "Accounting Period" shall be those Franchisor designated times, whether, weekly, monthly, or otherwise, as designated by Franchisor, with all such Accounting Periods automatically commencing on the earlier of the (a) Scheduled Business Commencement Date, or (b) the Actual Business Commencement Date of the Franchised Business and, continuing, throughout the Term of this Agreement. Unless otherwise designated by Franchisor at any time, unless otherwise specified in this Agreement, the Accounting Period shall be a weekly period for each and every week throughout the Term of this Agreement.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 42

Does Exhibit I for Bang Cookies contain state-specific addenda that may supersede the Franchise Agreement regarding the requirement to execute a general release as a condition to assignment, sale, or transfer?

Accepted Answer

Individual state law may supersede the provisions contained in your Franchise Agreement and, if applicable, your Multi-Unit Development Agreement respecting the requirement that you execute a general release as a condition to assignment, sale or transfer. See, the state specific addendums contained in Exhibit I of this Disclosure Document.

Source: Item 22 — CONTRACTS (FDD page 56)

Question 43

To what extent will Article 16.A.(2) of the Bang Cookies Franchise Agreement be enforced, according to the amendment?

Accepted Answer

the New York General Business Law, are met independently without reference to this amendment.

IN WITNESS WHEREOF, the parties have duly executed and delivered this New York amendment to the Bang Cookies Franchise LLC Franchise Agreement and, if applicable, the Development Agreement on the same date as the Franchise Agreement and Development Agreement were, respectively, executed.

[SIGNATURE PAGE TO FOLLOW]

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| Signature                                                | Signature           |
|----------------------------------------------------------|---------------------|
| Name and Title (please print) | Name (please print) |
| Dated | Dated Signature Name (please print) Dated |
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#### **NORTH DAKOTA FRANCHISE AGREEMENT AMENDMENT**

#### Amendments to the Bang Cookies Franchise Agreement

In recognition of the North Dakota Franchise Investment Law, Section 51-19, the parties to the attached Bang Cookies Franchise LLC Franchise Agreement (the "Franchise Agreement") agree as follows:

The North Dakota Addendum is only applicable if you are a resident of North Dakota or if your Bang Cookies Shop outlet will be located within the State of North Dakota.

- 1. Article 15 of the Franchise Agreement is hereby amended by the addition of the following language: "Provisions requiring North Dakota franchisees to sign a general release upon renewal of the Franchise Agreement are not enforceable in North Dakota."
- 2. Article 16 of the Franchise Agreement is hereby amended by the addition of the following language: "Provisions requiring North Dakota Franchisees to consent to termination or liquidated damages are not enforceable in North Dakota."
- 3. Articles 6 of the Franchise Agreement are hereby amended by the addition of the following language: "Covenants not to compete such as those mentioned above are generally considered unenforceable in the State of North Dakota."
- 4. Article 18 of the Franchise Agreement is hereby amended by the addition of the following language: "Covenants requiring North Dakota franchisees to consent to the jurisdiction of courts outside of North Dakota may not be enforceable in North Dakota."
- 5. Article 18 of the Franchise Agreement is hereby amended by the addition of the following language: "for North Dakota Franchisees, North Dakota law shall apply."
- 6. Article 18 of the Franchise Agreement is hereby amended by the addition of the following language: "Provisions requiring a franchisee to consent to a waiver of trial by jury are not enforceable under Section 51-19-09 of the North Dakota Franchise Investment Law."
- 7.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 44

To what extent does the Bang Cookies Franchisor agree to protect the franchisee against claims of infringement or unfair competition under the Minnesota Franchise Act?

Accepted Answer

#### **MINNESOTA FRANCHISE AND DEVELOPMENT AGREEMENT AMENDMENT**

#### Amendments to the Bang Cookies Franchise Agreement

In recognition of the requirements of the Minnesota Statutes, Chapter 80C. and Minnesota Franchise Rules, Chapter 2860, the parties to the attached Bang Cookies Franchise LLC Franchise Agreement (the "Franchise Agreement") and, if Franchisor and Franchisee both sign the Bang Cookies Franchise LLC Multi-Unit Development Agreement (the "Development Agreement"), as follows:

1.Article 14.C of the Franchise Agreement, under the heading "Conditions for Approval of Transfer," subarticle 14.C(6) is supplemented with the addition of the following language:

; provided, however, that all rights enjoyed by Franchisee and any causes of action arising in Franchisee's favor from the provisions of the Minnesota Franchise Act, Minn. Stat. Section 80C.14 et seq. and Minnesota Rules 2860.4400(D), shall remain in force; it being the intent of this provision that the non-waiver provisions of the Minnesota Rules 2860.4400(D) be satisfied; and

Minnesota law provides a franchisee with certain termination and non-renewal rights. Minn. Stat. Sect. 80C.14 Subdivisions 3, 4, and 5 require, except in certain specified cases, that franchisee be given 180 days-notice of nonrenewal of this Agreement by Franchisor.

2. Article 15.B of the Franchise Agreement, under the heading "Conditions for Renewal," sub article 15.B(8) is supplemented with the addition of the following language:

; provided, however, that all rights enjoyed by Franchisee and any causes of action arising in Franchisee's favor from the provisions of the Minnesota Franchise Act, Minn. Stat. Section 80C.14 et seq. and Minnesota Rules 2860.4400(D), shall remain in force; it being the intent of this provision that the non-waiver provisions of the Minnesota Rules 2860.4400(D) be satisfied; and

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 45

To what extent is each provision of the Bang Cookies amendment effective?

Accepted Answer

Each provision of this amendment shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Hawaii Franchise Investment Law are met independently without reference to this amendment.

Any foregoing acknowledgments are not intended to nor shall they act as a release, estoppel or waiver or any liability under the Minnesota Franchise Act.

Each provision of this amendment shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Minnesota Franchise Act are met independently without reference to this amendment.

Each provision of this amendment shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of North Dakota Law are met independently without reference to this amendment.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 46

To what extent is each provision of the amendment effective regarding Bang Cookies, concerning the jurisdictional requirements of the New York General Business Law?

Accepted Answer

- 4. There are circumstances in which an offering made by Bang Cookies Franchise LLC would not fall within the scope of the New York General Business Law, Article 33, such as when the offer and acceptance occurred outside the State of New York. However, an offer or sale is deemed made in New York if you are domiciled in New York or the Outlet will be opening in New York. Bang Cookies Franchise LLC is required to furnish a New York prospectus to every prospective franchisee who is protected under the New York General Business Law, Article 33.
- 5. Each provision of this amendment shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the New York General Business Law, are met independently without reference to this amendment.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 47

To what extent is each provision of this amendment effective regarding the jurisdictional requirements of the Illinois Franchise Disclosure Act for a Bang Cookies franchise?

Accepted Answer

- 4. Each provision of this amendment shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Illinois Franchise Disclosure Act (815 ILCS 705/1 to 705/45) are met independently without reference to this amendment.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 48

To what extent will Subarticle 16.A.(4)(f) of the Bang Cookies Franchise Agreement be enforced, according to the amendment?

Accepted Answer

- 2. Article 16 of the Franchise Agreement is hereby amended by the addition of the following language: "Provisions requiring North Dakota Franchisees to consent to termination or liquidated damages are not enforceable in North Dakota."
- 3. A release or waiver of rights executed by a franchisee shall not include rights under the Washington Franchise Investment Protection Act except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel. Provisions such as those which unreasonably restrict or limit the statute of limitations period for claims under the Act, rights or remedies under the Act such as a right to a jury trial may not be enforceable.
- A. The Rhode Island Franchise Investment Act, R.I. Gen. Law Ch. 395 Sec. 19-28.1-14 provides that a provision in a Franchise Agreement restricting jurisdiction or venue to a forum outside this state or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under the Rhode Island Franchise Investment Act.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 49

Does the Bang Cookies FDD include a balance sheet?

Accepted Answer

To the Members of Bang Cookies Franchise, LLC

#### **Opinion**

We have audited the accompanying financial statements of Bang Cookies Franchise, LLC (the Company), which comprise the balance sheet as of December 31, 2023 and the related statements of operations, members' equity, and cash flows for the period from January 19, 2023 to December 31, 2023 and the related notes to the financial statements.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bang Cookies Franchise, LLC as of December 31, 2023 and the results of its operations and its cash flows for the period from January 19, 2023 to December 31, 2023, in accordance with accounting principles generally accepted in the United States of America.

#### **Basis for Opinion**

Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 55–56)

Question 50

Does the Bang Cookies FDD include an income statement?

Accepted Answer

# **Independent Auditor's Report**

To the Members of Bang Cookies Franchise, LLC

#### **Opinion**

We have audited the accompanying financial statements of Bang Cookies Franchise, LLC (the Company), which comprise the balance sheet as of December 31, 2023 and the related statements of operations, members' equity, and cash flows for the period from January 19, 2023 to December 31, 2023 and the related notes to the financial statements.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bang Cookies Franchise, LLC as of December 31, 2023 and the results of its operations and its cash flows for the period from January 19, 2023 to December 31, 2023, in accordance with accounting principles generally accepted in the United States of America.

Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 55–56)

Question 51

Does the Bang Cookies FDD include a statement of cash flows?

Accepted Answer

[Item 23: RECEIPTS]

# **Bang Cookies Franchise, LLC Statement of Cash Flows**

![](_page_76_Picture_1.jpeg)

# **Period From January 19, 2023 to December 31, 2023**

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For purposes of the Statement of cash flows, cash equivalents include bank accounts and cash in transit for bank deposits with maturities of three months or less to be cash equivalents.

Our objectives are to obtain reasonable assurance about whether the financial statements are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.

Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 55–56)

Question 52

Does the Bang Cookies FDD include a statement of retained earnings?

Accepted Answer

ash Flows**

![](_page_76_Picture_1.jpeg)

# **Period From January 19, 2023 to December 31, 2023**

| By: Signature | Signature |
|---|---|
| Name and Title | Name (please print) |
|  |  |
| Signature |  |
| Name (please print) |  |
![](_page_77_Picture_0.jpeg)

# **Bang Cookies Franchise, LLC December 31, 2023 Notes To Financial Statements**

#### **1. COMPANY AND NATURE OF OPERATIONS**

Bang Cookies Franchise, LLC (the "Company") is a limited liability company that was formed on January 19, 2023 under the laws of the State of New Jersey for the purpose of offering franchise opportunities to entrepreneurs who want to own and operate their own business. The Company offers the qualified individuals the right to operate a business that offers a cookie shop that makes and sells giant, soft-baked, organic cookies and natural cookies, baked goods and, other products and services under "Bang Cookie" mark. The Company offers individual unit Shop franchises and area development franchises for the development of multiple Shops within a designated territory. The Company's parent is Bang Cookies Corporation, a Delaware corporation established on August 10, 2017. This company has not in the past and does not now offer franchises in any lines of business.

### **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

This summary of significant accounting policies is presented to assist the reader in understanding and evaluating the Company's financial statements. The financial statements and notes are representations of the Company's management, which is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles an

Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 55–56)

Question 53

Does the Bang Cookies FDD specify what the manuals say about using the Licensed Marks?

Accepted Answer

We will protect your right to use the Licensed Marks and other related rights and to protect you against claims of infringement and unfair competition related to the Licensed Marks, provided that you use the Licensed Marks in accordance with the terms of your Franchise Agreement, as designated by us in the Manuals, and, otherwise, as we instruct you. We will indemnify you against direct damages for trademark infringement in a proceeding arising out of your use of the Licensed Marks, provided your use of the Licensed Marks comply with the terms of your Franchise Agreement, the Manuals, our written instructions and, that you have timely notified us of the claim, have given us sole control of the defense and settlement of the claim, and you are in compliance with your Franchise Agreement and, if applicable, Multi-Unit Development Agreement. If we defend the claim, we have no obligation to indemnify or reimburse you with respect to any fees or disbursements of any attorney that you retain.

If any third party establishes, to our satisfaction and in our discretion that its rights to the Licensed Marks are, for any legal reason, superior to any of our rights or of a nature that we believe, in our discretion, that it is advisable to discontinue and/or modify the Licensed Marks, then we will modify and/or replace the Licensed Marks and you must use the substitutions, replacements and/or variations of and/or to the Licensed Marks and use those trademarks, service marks, logos and trade names required and designated by us. In such event, our sole liability and obligation will be to reimburse you for the direct out-of-pocket costs of complying with this obligation, which you must document to our satisfaction, including, by way of example, alterations in signage and replacement of marketing materials.

Source: Item 13 — TRADEMARKS (FDD pages 38–39)

Question 54

Does filing an appeal and/or bond affect the 30-day period for satisfying a judgment against a Bang Cookies franchisee?

Accepted Answer

- (h) This Agreement, or any of Franchisee's rights under this Agreement, is levied upon under any attachment or execution, and/or Execution is levied upon or against the Franchised Business or any assets of Franchisee, and/or a final judgment against Franchisee remains of

![](_page_137_Picture_0.jpeg)

record or unsatisfied for 30 days or more, unless an appeal and/or bond is filed;

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 55

Are the Bang Cookies financial statements presented according to GAAP?

Accepted Answer

erritory. The Company's parent is Bang Cookies Corporation, a Delaware corporation established on August 10, 2017. This company has not in the past and does not now offer franchises in any lines of business.

### **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

This summary of significant accounting policies is presented to assist the reader in understanding and evaluating the Company's financial statements. The financial statements and notes are representations of the Company's management, which is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of financial statements.

#### **A. Basis of Accounting**

The Company's financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP").

#### **B. Cash and Cash Equivalents**

For purposes of the Statement of cash flows, cash equivalents include bank accounts and cash in transit for bank deposits with maturities of three months or less to be cash equivalents.

#### **C. Federal Income Taxes**

The Company is organized as a limited liability company and is a disregarded entity for income tax purposes. The Company's accounts are included in the tax return of its members, and all taxes are assessed and paid at the individual member level. Therefore, no income tax liability for federal or state taxes has been recorded in the financial statement.

Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 55–56)

Question 56

Does the Bang Cookies franchise agreement specify how the Licensed Marks should be used?

Accepted Answer

Under the terms of the Franchise Agreement, you will be granted a license to use the "Bang Cookies" trademark and those other marks that we designate. We reserve the right to supplement and modify the marks that you may or may not use in connection with the operations of your Shop. You may only use the Licensed Marks as authorized by us in writing and under the terms of your Franchise Agreement. You may not use the Licensed Marks in the name of any Corporate Entity that you establish.

We will protect your right to use the Licensed Marks and other related rights and to protect you against claims of infringement and unfair competition related to the Licensed Marks, provided that you use the Licensed Marks in accordance with the terms of your Franchise Agreement, as designated by us in the Manuals, and, otherwise, as we instruct you. We will indemnify you against direct damages for trademark infringement in a proceeding arising out of your use of the Licensed Marks, provided your use of the Licensed Marks comply with the terms of your Franchise Agreement, the Manuals, our written instructions and, that you have timely notified us of the claim, have given us sole control of the defense and settlement of the claim, and you are in compliance with your Franchise Agreement and, if applicable, Multi-Unit Development Agreement. If we defend the claim, we have no obligation to indemnify or reimburse you with respect to any fees or disbursements of any attorney that you retain.

If any third party establishes, to our satisfaction and in our discretion that its rights to the Licensed Marks are, for any legal reason, superior to any of our rights or of a nature that we believe, in our discretion, that it is advisable to discontinue and/or modify the Licensed Marks, then we will modify and/or replace the Licensed Marks and you must use the substitutions, replacements and/or variations of and/or to the Licensed Marks and use those trademarks, service marks, logos and trade names required and designated by us. In such event, our sole liability and obligation will be to reimburse you for the direct out-of-pocket costs of complying with this obligation, which you must document to our satisfaction, including, by way of example, alterations in signage and replacement of marketing materials.

Source: Item 13 — TRADEMARKS (FDD pages 38–39)

Question 57

Is Bang Cookies Franchise LLC required to furnish a New York prospectus to every prospective franchisee, and if so, under what conditions?

Accepted Answer

- 4. There are circumstances in which an offering made by Bang Cookies Franchise LLC would not fall within the scope of the New York General Business Law, Article 33, such as when the offer and acceptance occurred outside the State of New York. However, an offer or sale is deemed made in New York if you are domiciled in New York or the Outlet will be opening in New York. Bang Cookies Franchise LLC is required to furnish a New York prospectus to every prospective franchisee who is protected under the New York General Business Law, Article 33.
- 5. Each provision of this amendment shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the New York General Business Law, are met independently without reference to this amendment.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 58

For a Bang Cookies franchise in Washington, what is the effect of Chapter 49.62 RCW on the franchise agreement's non-competition provisions?

Accepted Answer

e either in the State of Washington, or in a place mutually agreed upon at the time of the arbitration or as determined by the arbitrator.

![](_page_225_Picture_0.jpeg)

- 2. In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, Chapter 19.100 RCW shall prevail.
- 3. A release or waiver of rights executed by a franchisee shall not include rights under the Washington Franchise Investment Protection Act except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel. Provisions such as those which unreasonably restrict or limit the statute of limitations period for claims under the Act, rig

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 59

Does the Bang Cookies Franchisee need to be in substantial compliance with the agreement for a transfer to be approved?

Accepted Answer

Provided Franchisee and each Owner and Spouse, respectively, are in substantial compliance with this Agreement and the Ancillary Agreements, and Franchisor does not elect to exercise Franchisor's right of first refusal as set forth in Article 14.F. below, Franchisor shall not unreasonably withhold its approval of a Transfer by Franchisee or an Owner. The proposed transferee (including such assignee's owner(s) and spouse(s) if the proposed transferee is a Corporate Entity) must be of good moral character, have sufficient business experience, aptitude and financial resources to own and operate a Bang Cookies Shop, and otherwise meet Franchisor's then applicable standards for franchisees as determined by Franchisor in its sole, but reasonable discretion. Furthermore, the proposed transferee and the proposed transferee's owners and spouses may not own or operate, or intend to own or operate, a Competitive Business. Franchisee agrees that Franchisor may condition approval of a Transfer upon Franchisee's satisfaction (either before, or contemporaneously with, the effective date of the Transfer) of the following:

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 60

Does the Bang Cookies franchisee's obligation to indemnify the franchisor survive the termination or expiration of the franchise agreement?

Accepted Answer

Franchisee and each Owner acknowledge and agree that the terms of this Article 10.B. shall survive the termination, expiration or Transfer of this Agreement.

Under no circumstances are the Franchisor Indemnified Parties required or obligated to seek recovery from third parties or otherwise mitigate their respective losses in order to maintain a claim against Franchisee or any Owner.

Franchisee and each of the Owners agree that Franchisor's failure to pursue recovery or mitigate loss in no way reduces the amounts recoverable from Franchisee or any Owner.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 61

Does the Bang Cookies Franchisee's owner need to be in compliance with the agreement for a transfer to be approved?

Accepted Answer

itten consent of Franchisor, or otherwise in violation of this Agreement including, but not limited to this Article 14.B. shall constitute a breach of this Agreement and shall convey to the transferee no rights or interests in this Agreement; and
- (5) In the event of a Transfer of this Agreement that is approved by Franchisor, Franchisee shall not be relieved of Franchisee's obligations under this Agreement whether said obligations accrued and/or arose prior to and/or after the date of Transfer.

# **14.C. CONDITIONS FOR APPROVAL OF TRANSFER**

Provided Franchisee and each Owner and Spouse, respectively, are in substantial compliance with this Agreement and the Ancillary Agreements, and Franchisor does not elect to exercise Franchisor's right of first refusal as set forth in Article 14.F. below, Franchisor shall not unreasonably withhold its approval of a Transfer by Franchisee or an Owner. The proposed transferee (including such assignee's owner(s) and spouse(s) if the proposed transferee is a Corporate Entity) must be of good moral character, have sufficient business experience, aptitude and financial resources to own and operate a Bang Cookies Shop, and otherwise meet Franchisor's then applicable standards for franchisees as determined by Franchisor in its sole, but reasonable discretion.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 62

Does the Bang Cookies Franchisee's spouse need to be in compliance with the agreement for a transfer to be approved?

Accepted Answer

Provided Franchisee and each Owner and Spouse, respectively, are in substantial compliance with this Agreement and the Ancillary Agreements, and Franchisor does not elect to exercise Franchisor's right of first refusal as set forth in Article 14.F. below, Franchisor shall not unreasonably withhold its approval of a Transfer by Franchisee or an Owner. The proposed transferee (including such assignee's owner(s) and spouse(s) if the proposed transferee is a Corporate Entity) must be of good moral character, have sufficient business experience, aptitude and financial resources to own and operate a Bang Cookies Shop, and otherwise meet Franchisor's then applicable standards for franchisees as determined by Franchisor in its sole, but reasonable discretion. Furthermore, the proposed transferee and the proposed transferee's owners and spouses may not own or operate, or intend to own or operate, a Competitive Business. Franchisee agrees that Franchisor may condition approval of a Transfer upon Franchisee's satisfaction (either before, or contemporaneously with, the effective date of the Transfer) of the following:

- (1) Franchisee must provide written notice to Franchisor of the proposed Transfer of this Agreement at least 30 days prior to the Transfer, and Franchisee must have also satisfied the obligations set forth in Article 14.F. below;
- (2) All accrued monetary obligations of Franchisee and all other outstanding obligations to Franchisor and/or Franchisor's affiliates under this Agreement and the Ancillary Agreements must be satisfied in a timely manner, and Franchisee must satisfy all trade, supplier, and vendor accounts

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 63

Can the Bang Cookies Franchisor change the Brand Development Fund Fee percentage?

Accepted Answer

- (1) If Franchisor institutes the Brand Development Fund, Franchisee shall pay, on the Due Date, a mandatory and continuing fee to the Brand Development Fund in an amount equal to a percentage of Gross Sales (as determined and designated by Franchisor in Franchisor's Reasonable Business Judgment) for each weekly Accounting Period (the "Brand Development Fund Fee"), provided, however, Franchisee will not be required to contribute more than 2% of the Gross Sales of the Franchised Business for each weekly Accounting Period;

- (2) Franchisor will provide Franchisee with written notice of the percentage of Gross Sales that Franchisee is required to contribute to the Brand Development Fund.

Upon such written notice to Franchisee, the percentage of Gross Sales to be paid by Franchisee to the Brand Development Fund will be applicable for each and every weekly Accounting Period thereafter during the Term until otherwise designated by Franchisor in writing.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

Question 64

Does the Bang Cookies franchisor have the option to assume the defense of any action against them, and if so, does this relieve the franchisee of their indemnification obligations?

Accepted Answer

Franchisor shall indemnify, defend, and hold Franchisee and Franchisee's officers, directors, shareholders, members, owners, partners, agents, representatives, independent contractors, employees, assigns and successors (the "Franchisee Indemnified Parties") harmless from all losses, expenses, claims, causes of action, lawsuits, liabilities, taxes, costs, demands, proceedings, investigation, hearing, and/or damages solely arising out of, or solely relating to, Franchisor's gross negligence in the operation of Franchisee's Bang Cookies Shop that was the direct cause of any such loss, expense, liability or damage provided Franchisee immediately notifies Franchisor of such claim, cause of action, lawsuit, demand, proceeding, investigation or hearing, and Franchisor shall pay all of the Franchisee Indemnified Parties' reasonable costs, fees and expenses of defending any such claim, cause of action, lawsuit, demand, proceeding, investigation, and/or hearing brought against any of the Franchisee Indemnified Parties or any such claim, cause of action, lawsuit, demand, proceeding, investigation, and/or hearing in which any of the Franchisee Indemnified Parties is named as a party, including, without limitation, reasonable accountant fees, attorney fees, and expert witness fees, court costs, deposition fees, travel expenses and other litigation expenses provided Franchisee immediately notifies Franchisor of such claim, cause of action, lawsuit, demand, proceeding, investigation or hearing. Franchisor agrees that the terms of this Article 10.C. shall survive the termination, expiration or Transfer of this Agreement.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

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