In the event of a default by the franchisee, is termination the sole remedy available to Bang Cookies?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
Without limitation to the foregoing, additionally, in the event of the termination of this Agreement as a result of a default or breach by Franchisee and/or, by Franchisee's Owners and/or affiliates of any Ancillary Agreements, Franchisor, in addition to any and all other rights and remedies available to Franchisor as set forth in this Agreement, and, at law and in equity, shall possess the following rights and remedies, each of which are not exclusive of the other and may be/are in conjunction with one another:
(1) To void and terminate this Agreement, and thereafter to market, sell, transfer, convey and assign the rights granted to Franchisee under this Agreement to any other person or entity in Franchisor's sole discretion and without compensation to Franchisee.
(2) To hold Franchisee and Franchisee's Owners liable for, and recover from each of them, jointly and severally, all payments, fees, monetary obligations, financial obligations, interest, and charges due and owing to Franchisor from Franchisee pursuant to this Agreement, the Ancillary Agreements, and/or any other agreements between Franchisee and Franchisor, including, without limitation, Royalty Fees and Advertising Contributions with each and every payment and obligation to be accelerated and due immediately.
(3) To hold Franchisee and Franchisee's Owners liable for, and recover from each of them, jointly and severally, lost revenues, profits, and fees including, but not limited to Royalty Fees, Brand Development Fund Fee, Advertising Contributions, and all other fees, revenues and/or expenses that would have been paid to Franchisor, under the terms of this Agreement and throughout the Term of this Agreement, had a breach not occurred and had Franchisor not terminated this Agreement.
In calculating and determining the foregoing Franchisee agrees that in calculating and in determining such damages that it is fair and reasonable to use Franchisee's most recent calendar year Gross Sales in calculating and determining Franchisor lost revenues and fees and by assuming that such Gross Sales would have been earned in each and every year throughout the remainder of the Term had this Agreement not been terminated.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, termination is not the sole remedy available to the franchisor in the event of a franchisee default. Bang Cookies has several options, which can be exercised individually or in combination.
Specifically, Bang Cookies can void and terminate the Franchise Agreement, then market and sell the franchisee's rights to another party without compensating the original franchisee. Bang Cookies can also hold the franchisee and their owners liable for all outstanding payments, fees, monetary obligations, and interest. This includes accelerating all payments due under the agreement, making them immediately payable.
Furthermore, Bang Cookies can recover lost revenues, profits, and fees that would have been paid throughout the term of the agreement had the breach not occurred. To calculate these damages, Bang Cookies may use the franchisee's most recent calendar year gross sales as a basis for projecting future revenues. These remedies are not exclusive, meaning Bang Cookies can pursue multiple avenues of compensation and legal recourse simultaneously.