Can Bang Cookies disapprove of a proposed lease?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
ent (the "Collateral Assignment of Lease"). We possess the right to disapprove of a proposed lease if the landlord refuses to sign the Lease Agreement Rider in substantially the form set forth in Exhibit 4 to the Franchise Agreement. The Lease Agreement Rider grants certain rights to us, including our right to be notified in the event of a lease default and, potentially, for us to enter the premises of your Shop.
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- System Supplies Your Shop must maintain an initial and ongoing inventory of System Supplies. You must purchase the System Supplies, as designated by us, from us, our affiliates, and/or our designated suppliers.
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- Furniture and Fixtures Your Shop must be equipped with branded and unbranded furniture and fixtures that we designate and that meet our standards and specifications.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 24–28)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, Bang Cookies has the right to disapprove a proposed lease under specific circumstances. Bang Cookies can disapprove a lease if the landlord does not agree to sign the Lease Agreement Rider in the form presented in Exhibit 4 of the Franchise Agreement.
The Lease Agreement Rider is important because it grants Bang Cookies certain rights related to the franchisee's lease. These rights include the ability to receive notification if the franchisee defaults on the lease and the potential right for Bang Cookies to enter the premises of the franchisee's shop. This ensures that Bang Cookies can protect its interests and brand standards even if a franchisee faces difficulties.
While Bang Cookies does not review the general terms of the lease, they require the landlord to acknowledge Bang Cookies's rights as outlined in the Lease Agreement Rider. Additionally, the franchisee must collaterally assign the lease to Bang Cookies, as detailed in the Collateral Assignment of Lease (Exhibit 5 of the Franchise Agreement). This gives Bang Cookies further control and security regarding the location of the franchise.
This provision is fairly common in franchising, as franchisors often want to ensure their brand's presence is secure and that they have some recourse if a franchisee's business fails. Prospective Bang Cookies franchisees should carefully review Exhibit 4 and Exhibit 5 of the Franchise Agreement to fully understand the implications of the Lease Agreement Rider and the Collateral Assignment of Lease.