What constitutes 'cause' for Bang Cookies to terminate the Multi-Unit Development Agreement?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
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 |
| g | "Cause" defined-curable | Not | Not applicable. |
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Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–49)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, there are several conditions that constitute 'cause' for the franchisor to terminate a Multi-Unit Development Agreement. These include abandoning obligations under the agreement, discontinuing development of shops within the designated area, or becoming insolvent or bankrupt.
Specifically, Bang Cookies can terminate the agreement if a franchisee abandons their obligations, discontinues shop development for four consecutive months (or a shorter period indicating intent to discontinue), becomes insolvent or bankrupt, makes an assignment for the benefit of creditors, or has a receiver appointed. Furthermore, failure to meet development obligations under the Development Schedule, such as not establishing, opening, or maintaining the required number of shops within a Development Period, also constitutes cause for termination.
Another cause for termination is if any single Franchise Agreement is terminated for any shop or any other Franchise Agreement with Bang Cookies. This means that issues with one location can impact the entire multi-unit agreement. These terms are important for potential franchisees to consider, as they outline the circumstances under which Bang Cookies can terminate the development agreement, potentially resulting in a loss of rights and investment.