What is a Bang Cookies franchisee prohibited from doing in terms of business practices or personal conduct?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
and/or rights in Franchisee without Franchisor's prior approval, written consent, and/or otherwise not in accordance with this Agreement;
- (i) Franchisee discloses, divulges, provides access to, communicates, and/or permits the communication of the contents, data and/or information contained in the operations manual to any third party not otherwise authorized by Franchisor;
- (j) Franchisee discloses, divulges, provides access to, communicates, and/or permits the communication of Confidential Information to any third party not otherwise authorized by Franchisor;
- (k) Franchisee engages in any activity that injures, harms, damages, or otherwise has a material adverse effect on Franchisor, the System, the Licensed Marks, Bang Cookies Shops, Franchisee's Shop, and/or the reputation of the Bang Cookies brand;
- (l) Franchisee, an Owner, and/or a Spouse, as applicable and whether individually or jointly, breaches or is in default of an Ancillary Agreement, and, if the applicable agreement provides for the opportunity to cure, fails to timely cure the breach or default of the Ancillary Agreement, including, without limitation, the Franchise Owner and Spouse Agreement and Guaranty;
- (m) Franchisee and/or an Owner of Franchisee is convicted of a felony crime, and/or pleads guilty or nolo contendere to a felony crime;
- (n) Franchisee and/or an Owner of Franchisee engages in intentionally dishonest and/or unethical conduct that, in Franchisor's Reasonable Business Judgment, results in embarrassment to Franchisor, the System, the Licensed Marks, Bang Cookies Shops, Franchisee's Shop, and/or the reputation of the Bang Cookies brand;
- (o) Franchisee fails to complete, to Franchisor's reasonable satisfaction, the Training Program and/or supplemental training programs designated by Franchisor;
- (p) Franchisee fails, upon receiving actual or constructive notice, shall: (1) immediately notify Franchisor of any known breach of the Confidentiality Agreement by any person or entity; (2) immediately notify Franchisor of facts and information that would cause a reasonable person
to believe that a person or entity violated the Confidentiality Agreement and/or is in the process of violating the Confidentiality Agreement; and (3) take reasonable steps including ,notice to Franchisor and Franchisee's consultation with Franchisee's legal counsel, to prevent any person or entity from violating the terms of the Confidentiality Agreement and/or otherwise publicly disseminating Confidential Information;
- (q) Franchisee misappropriates, misuses, or makes any unauthorized use of the Licensed Marks, the Confidential Information, and/or the System and/or Franchisee materially impairs the goodwill associated with the Licensed Marks, and/or Franchisee applies for registration of the Licensed Marks anywhere in the world; and/or
- (r) Franchisee and/or an Owner fails to comply with Anti-Terrorism Laws or becomes listed on the Annex to Executive Order 13244.
- (3) Defaults and Automatic Termination After 10 Day Cure Period Franchisee shall be in default of this Agreement and, this Agreement shall be terminated, upon the occurrence of any one or more of the following actions, inactions, omissions, events, and/or circumstances, unless, Franchisee timely cures, to the satisfaction of Franchisor, such default / action, inaction, omission, event, and/or circumstance within 10 calendar days of Franchisor's written notice:
- (a) Franchisee fails, refuses, and/or is unable to timely pay the Royalty Fee, Advertising Contribution, and/or any other payment, fee, financial obligation, charge, and/or monetary obligation payable and/or due to Franchisor pursuant to the terms of this Agreement, under this Agreement, and/or any other agreement between Franchisor and Franchisee;
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies' 2024 Franchise Disclosure Document, franchisees face several restrictions regarding business practices and personal conduct that could be detrimental to the brand. During the term of the agreement, a franchisee is restricted from engaging in "Prohibited Activities" such as owning or having an interest in a competitive business (with a minor exception of owning 3% or less in a publicly traded company), operating or performing services for a competitive business, diverting business or customers from Bang Cookies, or inducing customers to other businesses that are not Bang Cookies Shops. These restrictions also apply to the franchisee's owners and spouses, who must sign a Franchise Owner and Spouse Agreement and Guaranty.
Bang Cookies franchisees must also avoid actions that could harm the brand's reputation. This includes engaging in any activity that injures or damages Bang Cookies, its system, licensed marks, or individual shops. Franchisees, owners, or spouses breaching any ancillary agreement or being convicted of a felony crime are also prohibited. Dishonest or unethical conduct that embarrasses Bang Cookies can also lead to violations. Furthermore, franchisees must complete the required training programs to the franchisor's satisfaction and must notify Bang Cookies of any known breach of the Confidentiality Agreement.
In terms of general business practices, Bang Cookies franchisees must ensure all advertising is factual and ethical, adhering to Bang Cookies' standards. Franchisees must also comply with Anti-Terrorism Laws and refrain from any business or personal conduct that could be injurious to Bang Cookies. Bang Cookies retains the right to reject any advertising related to the franchised business. These stipulations are designed to protect the Bang Cookies brand and maintain consistent standards across all franchise locations. Franchisees should carefully review these restrictions to understand their obligations and avoid potential breaches of the franchise agreement.