For a complete understanding of all rights and obligations of both the franchisor and the franchisee, what document should be referred to in addition to the Public Offering Statement for a Bang Cookies franchise?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
ing, without limitation, the grant of a collateral assignment; (c) a merger, consolidation, exchange of shares or other ownership interests, issuance of additional ownership interests or securities representing or potentially representing ownership interests, or redemption of ownership interests; (d) a sale or exchange of voting interests or securities convertible to voting interests, or an agreement granting the right to exercise or control the exercise of the voting rights of any holder of ownership interests or to
control the operations or affairs of Franchisee; and/or (e) the legal and/or equitable transfer and/or sale of an Owners interests and/or voting rights in Franchisee.
SECTION 2 DEVELOPMENT RIGHTS
2.1 DEVELOPMENT GRANT AND DEVELOPMENT OBLIGATIONS
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.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, prospective franchisees entering into a development agreement should refer to both the Franchise Disclosure Document and the Franchise Agreement to fully understand their rights and obligations. Specifically, Section 2.1 discusses the franchisee's obligation to develop Bang Cookies shops within a designated Development Area, in accordance with a Development Schedule, and in accordance with the terms and provisions of each respective Franchise Agreement.
For each Bang Cookies Shop owned, developed, and opened in the Development Area, the franchisee must execute Bang Cookies's then-current standard Franchise Agreement. This agreement must be executed on or before the earlier of several dates: when the franchisee executes a lease for the Shop Location (subject to the Franchisor's approval), when the franchisee enters into a purchase agreement for the real estate for the Shop Location (again, subject to Franchisor's approval), or six months prior to the date that each respective Development Shop must be open and in operation according to the Development Schedule.
Bang Cookies retains the right to modify the Franchise Agreement from time to time, at its sole discretion. Reasonable modifications and amendments to the Franchise Agreement will not alter the franchisee's obligations under the Development Agreement. The franchisee's obligations to pay royalties and other fees as outlined in each Franchise Agreement remain in effect and are not reduced or mitigated by the Development Agreement. The only fee modified by the Development Agreement is the initial franchise fee, as defined in Section 4.2 of the Development Agreement.