factual

Does the Bang Cookies franchise agreement allow for the consolidation of proceedings between a franchisee and the franchisor with any other proceeding between the franchisor and a third party?

Bang_Cookies Franchise · 2024 FDD

Answer from 2024 FDD Document

FRANCHISOR AND FRANCHISEE AGREE THAT ALL PROCEEDINGS AND/OR LEGAL ACTIONS ARISING OUT OF OR RELATED TO THIS AGREEMENT AND/OR THE OFFER AND SALE OF THE BANG COOKIES FRANCHISE FROM FRANCHISOR TO FRANCHISEE, WILL BE CONDUCTED ON AN INDIVIDUAL BASIS AND NOT A CLASS-WIDE BASIS, AND THAT ANY PROCEEDING BETWEEN FRANCHISEE, FRANCHISEE'S OWNERS, SPOUSES AND/OR GUARANTORS AND FRANCHISOR AND/OR FRANCHISOR'S AFFILIATES, OFFICERS, DIRECTORS AND/OR EMPLOYEES MAY NOT BE CONSOLIDATED WITH ANY OTHER PROCEEDING BETWEEN FRANCHISOR AND ANY OTHER THIRD PARTY.

Source: Item 23 — RECEIPTS (FDD pages 56–245)

What This Means (2024 FDD)

According to the 2024 Bang Cookies Franchise Disclosure Document, the franchise agreement explicitly prohibits the consolidation of proceedings between a franchisee and Bang Cookies with any other proceeding between Bang Cookies and a third party. This means that any legal actions or proceedings initiated by a franchisee against Bang Cookies, or vice versa, must be conducted on an individual basis.

This clause prevents a franchisee from joining their legal case with other similar cases Bang Cookies may be involved in with other parties. This can be a disadvantage for the franchisee, as it prevents them from leveraging the collective resources and knowledge of a larger group. It also means that the franchisee will bear the full cost and responsibility of their legal action, without the ability to share expenses or strategies with others.

Conversely, this limitation benefits Bang Cookies by preventing franchisees from uniting to pursue legal action as a group. This can reduce Bang Cookies's potential legal exposure and make it more difficult for franchisees to challenge the franchisor's decisions or practices. Prospective franchisees should carefully consider this provision and its implications for their ability to seek legal recourse against Bang Cookies.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.