Does the Bang Cookies franchise agreement state that the franchisor can recover Advertising Contributions from the franchisee after termination?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
extend credit to, or otherwise finance Franchisee's operation of the Franchised Business. Nothing contained in this Article 5.D. shall be interpreted as interfering with and/or negating Franchisor's rights and remedies as set forth in Article 16 and, as otherwise set forth in this Agreement. All rights and remedies of Franchisor are cumulative and shall be interpreted as cumulative to one another.
5.E. APPLICATION OF PAYMENTS
Franchisor has sole discretion to apply any payments received from Franchisee or to offset any indebtedness of Franchisee to Franchisor to any past due indebtedness of Franchisee for Royalty Fees, Advertising Contributions, purchases from Franchisor or its affiliates, interest or any other indebtedness of Franchisee to Franchisor or its affiliates.
**5.F.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, the franchisor has the right to apply payments received from the franchisee to any past due indebtedness, including Advertising Contributions. This means that Bang Cookies can use any payments they receive to offset what the franchisee owes them for advertising, even after the franchise agreement has ended.
This clause in the Bang Cookies franchise agreement protects the franchisor's financial interests by ensuring they can recover outstanding debts. It also prohibits the franchisee from withholding payments, even if they believe Bang Cookies isn't fulfilling its obligations. This could create a financial risk for franchisees, as they must continue to pay fees even if they have grievances with the franchisor.
It is important for a prospective Bang Cookies franchisee to understand that they cannot offset payments owed to Bang Cookies, including advertising contributions, under any circumstances. This includes any alleged non-performance, material breach, or default by Bang Cookies. Franchisees should seek legal counsel to fully understand the implications of this clause and how it might affect their rights and obligations under the franchise agreement.