What is the 'First Development Shop' in the context of a Bang Cookies development agreement?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
"Development Shop" shall have the meaning defined and set forth in Section 2.1 of this Agreement.
"Development Shop Initial Franchise Fee" shall have the meaning defined and set forth in Section 4.2 of this Agreement.
"Development Schedule" shall have the meaning defined and set forth in Section 4.4 of this Agreement.
"Effective Date" shall be the date set forth, defined and referred to in the first paragraph of this Agreement.
"First Development Shop" refers to and means the Shop to be developed by Franchisee as the first Development Shop to developed and operated by Franchisee within the Development Area.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, the 'First Development Shop' refers to the initial Bang Cookies shop that a franchisee is obligated to develop and operate within a designated Development Area. This is according to Section 2.1 of the agreement. The aggregate number of Development Shops, including the First Development Shop, is referred to as the 'Total Development Shops'.
The First Development Shop is significant because it marks the franchisee's entry into the multi-unit development agreement with Bang Cookies. The franchisee must adhere to a development schedule, and failure to comply with it can lead to termination of the agreement and loss of future development rights. The Franchise Disclosure Document states that simultaneous or prior to the execution of the development agreement, Bang Cookies and the franchisee will enter into a Shop Franchise Agreement for the development and operation of the First Development Shop.
Notably, the initial franchise fee for the First Development Shop is $35,000, payable upon the execution of the applicable Franchise Agreement. For each additional Development Shop beyond the first, the franchise fee is waived. This fee structure incentivizes franchisees to commit to developing multiple locations within their designated area, as subsequent shops come with a reduced initial investment regarding the franchise fee.