In the Bang Cookies Franchise Agreement, what is the significance of the 'Scheduled Business Commencement Date'?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
onsideration of the foregoing recitals and other good and valuable consideration, the receipt and sufficiency of which is hereby mutually acknowledged, the parties do hereby agree, as follows:
ARTICLE 1 DEFINITIONS
Supplementing the terms and definitions contained in the foregoing "Recitals":
"Accounting Period" refers to and means the period of time selected and determined by Franchisor for the required measurement and reporting of financial information and payment of financial obligations by Franchisee. The applicable measurement period will be determined by Franchisor from time to time with respect to Franchisee's obligations to report financial information and data to Franchisor and Franchisee's payment of all fees and other obligations under this Agreement. The respective "Accounting Period" shall be those Franchisor designated times, whether, weekly, monthly, or otherwise, as designated by Franchisor, with all such Accounting Periods automatically commencing on the earlier of the (a) Scheduled Business Commencement Date, or (b) the Actual Business Commencement Date of the Franchised Business and, continuing, throughout the Term of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, the 'Scheduled Business Commencement Date' marks a key milestone in the franchise agreement. Specifically, it is defined as the date that occurs on the 10-month anniversary of the Effective Date of the agreement.
This date is significant because it triggers the start of the 'Accounting Period'. The Accounting Period is used by Bang Cookies to measure and report financial information, as well as to determine when franchisees must fulfill their financial obligations. The Accounting Period commences on the earlier of either the Scheduled Business Commencement Date or the Actual Business Commencement Date, and continues throughout the term of the agreement. Unless Bang Cookies specifies otherwise, the Accounting Period is a weekly period.
For a prospective Bang Cookies franchisee, this means that financial reporting and payment obligations begin no later than 10 months after signing the franchise agreement, regardless of whether the store is actually open. This highlights the importance of careful planning and timely execution in setting up the franchise to avoid financial penalties or reporting issues.