What is a 'Development Shop' 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' 2024 Franchise Disclosure Document, a 'Development Shop' refers to each Bang Cookies shop that a franchisee is obligated to develop, open, and operate within a designated 'Development Area'. These shops must be developed, opened, and operated in strict accordance with a 'Development Schedule' and the terms outlined in their respective Franchise Agreements. The total number of 'Development Shops', including the initial one, is specified in the 'Development Information Sheet'.
This means that if you enter into a multi-unit development agreement with Bang Cookies, you are committing to open a certain number of locations within a specific geographic area and timeframe. Failing to meet the development schedule can result in the termination of the agreement and loss of future development rights. The Development Area is defined in the Development Information Sheet, which is attached as Schedule A to the agreement.
Bang Cookies also grants franchisees limited exclusivity within the Development Area, meaning that Bang Cookies will not open, operate, or license other franchises within that area as long as the franchisee complies with the agreement terms and the Development Schedule. However, the territory for each individual Development Shop is determined by its Franchise Agreement, and the combined territories of all shops may be smaller than the entire Development Area. Franchisees must also execute Bang Cookies' current standard Franchise Agreement for each shop they open in the Development Area.
Prospective franchisees should carefully review the Development Schedule and Development Area outlined in the Development Information Sheet to fully understand their obligations and the potential market for Bang Cookies shops. They should also inquire about the criteria used to determine the territory for each individual Development Shop to ensure sufficient market potential for each location.