What aspects are covered under the 'Development Grant and Development Obligations' section for a Bang Cookies franchise?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisor grants to Franchisee the right, and Franchisee accepts the right and undertakes the obligation to develop Bang Cookies Shops, each to be developed, opened and operated by Franchisee within the Development Area (each, a "Development Shop"), provided that Franchisee develops, opens and operates such Development Shops in strict accordance with the Development Schedule, and, in accordance with the terms and provisions of each respective Franchise Agreement.
The aggregate number of Development Shops (including the First Development Shop) (collectively, referred to as the "Total Development Shops") that are authorized by this Agreement and required for development, subject to the terms of this Agreement and each respective Franchise Agreement, is set forth and defined in the Development Information Sheet.
The Development Area is and shall constitute the geographic area set forth and identified in the Development Information Sheet.
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.
Franchisee agrees that Franchisee must: (a) open and commence the operations of each new Development Shop in accordance with the Development Schedule for each respective Development Period, as set forth in this Agreement; and (b) maintain in operation the minimum cumulative number of Development Shops in accordance with the Development Schedule for each respective Development Period. Franchisee agrees that "time is of the essence" with respect to Franchisee's development obligations under this Agreement, and that Franchisee's failure to comply with the Development Schedule is grounds for immediate termination of this Agreement and, any future development rights granted under this Agreement.
During the Term of this Agreement, provided that Franchisee is in compliance with the terms and provisions of this Agreement including, but not limited to, the Development Schedule, and each respective Franchise Agreement, Franchisor will not open, operate, or license any third party the right to open or operate Bang Cookies Shops within the Development Area. Franchisee agrees that the designated territory for each Development Shop shall be determined by the Franchise Agreement for each respective Development Shops and that, in aggregate, the operating territories for Franchisee's Development Shops may be smaller than the Development Area.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, Section 2.1, 'Development Grant and Development Obligations,' outlines the rights and obligations of the franchisee regarding the development of Bang Cookies shops within a specific area. Bang Cookies grants the franchisee the right, and the franchisee accepts the obligation, to develop, open, and operate Bang Cookies shops within a defined Development Area. This is contingent upon strict adherence to the Development Schedule and the terms outlined in each respective Franchise Agreement. The number of shops required for development is detailed in the Development Information Sheet.
The Development Area, a key component of the agreement, is geographically defined in the Development Information Sheet, which is attached as Schedule A to the agreement. This sheet must be completed and signed by Bang Cookies to be effective. The franchisee is obligated to open and operate new shops according to the Development Schedule and maintain the minimum cumulative number of shops as per the schedule. Failure to comply with the Development Schedule can result in immediate termination of the agreement and any future development rights.
Bang Cookies also commits to not opening, operating, or licensing any third party to open or operate Bang Cookies shops within the Development Area during the term of the agreement, provided the franchisee is in compliance with all terms, including the Development Schedule. However, the territory for each individual shop is determined by its respective Franchise Agreement, and the aggregate operating territories for all of the franchisee's shops may be smaller than the overall Development Area. This means that while the franchisee has the right to develop within a certain area, the exclusivity for each shop may be limited to a smaller territory within that area.