On what basis must all legal actions related to the Bang Cookies franchise agreement be conducted?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
vent that an arbitrator in any arbitration proceeding and/or, a court of competent jurisdiction shall issue an award, judgment, decision and/or order finding, holding and/or declaring Franchisee's breach of this Agreement than Franchisor shall also be entitled to the recovery of all reasonable attorney fees, costs and expenses associated with and/or related to such arbitration and/or litigation. Said fees, costs and expenses shall include, but not be limited to, attorney fees, arbitration fees, arbitrator fees, deposition expenses, expert witness fees and filing fees.
18.O. NO CLASS ACTION OR MULTI-PARTY ACTIONS
FRANCHISOR AND FRANCHISEE AGREE THAT ALL PROCEEDINGS AND/OR LEGAL ACTIONS ARISING OUT OF OR RELATED TO THIS AGREEMENT AND/OR THE OFFER AND SALE OF THE BANG COOKIES FRANCHISE FROM FRANCHISOR TO FRANCHISEE, WILL BE CONDUCTED ON AN INDIVIDUAL BASIS AND NOT A CLASS-WIDE BASIS, AND THAT ANY PROCEEDING BETWEEN FRANCHISEE, FRANCHISEE'S OWNERS, SPOUSES AND/OR GUARANTORS AND FRANCHISOR AND/OR FRANCHISOR'S AFFILIATES, OFFICERS, DIRECTORS AND/OR EMPLOYEES MAY NOT BE CONSOLIDATED WITH ANY OTHER PROCEEDING BETWEEN FRANCHISOR AND ANY OTHER THIRD PARTY.
**18.P.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, all legal actions or proceedings related to the franchise agreement must be conducted on an individual basis. This means that franchisees are prohibited from participating in class-action lawsuits against Bang Cookies. Furthermore, legal proceedings involving a franchisee, their owners, spouses, or guarantors cannot be combined with any other legal actions between Bang Cookies and a third party. This requirement is outlined in two separate sections of the FDD, emphasizing its importance.
This clause has significant implications for prospective Bang Cookies franchisees. It prevents franchisees from joining forces to pursue legal claims collectively, which could reduce their individual bargaining power and increase their legal costs. Class action lawsuits can be an effective way for franchisees to address systemic issues with a franchise system, but this option is not available to Bang Cookies franchisees.
Such clauses are increasingly common in franchise agreements as they protect the franchisor from large, consolidated legal actions. However, franchisees should carefully consider the potential impact of this clause on their ability to seek legal recourse if disputes arise with Bang Cookies. It is advisable to consult with an attorney to fully understand the implications of waiving the right to participate in class-action lawsuits.