What is the Bang Cookies franchisee's obligation regarding documentation of costs incurred when discontinuing the use of licensed marks?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee agrees that at any time should Franchisor determine, in Franchisor's sole discretion and based on Franchisor's Reasonable Business Judgment, that it is advisable for Franchisor, the System, and/or Franchisee to replace, modify, substitute, and/or discontinue use of any Licensed Marks, then Franchisee shall comply with Franchisor's determination and instructions as to the replacement, modification, substitution, and/or discontinuance of such Licensed Mark(s). Franchisee shall comply within the foregoing requirements within a reasonable time period after notice by Franchisor. If Franchisee is required to take action pursuant to instruction by Franchisor pursuant to this Article 11.D. or, if Franchisee is otherwise required to replace, modify, substitute, and/or discontinue use of any Licensed Marks, the sole liability and obligation of Franchisor to Franchisee shall be to reimburse Franchisee for the reasonable and direct costs incurred by Franchisee in complying with this obligation, which Franchisee shall document to the satisfaction of Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, if Bang Cookies decides that a franchisee needs to replace, modify, substitute, or discontinue the use of any licensed marks, the franchisee must comply with Bang Cookies's instructions. This could involve actions like changing signage, marketing materials, or product packaging to reflect the new branding.
In such a scenario, Bang Cookies will reimburse the franchisee for the reasonable and direct costs incurred while complying with these changes. However, the franchisee bears the responsibility of documenting these costs to Bang Cookies's satisfaction. This means the franchisee must keep detailed records and provide evidence of all expenses related to the replacement, modification, substitution, or discontinuance of the licensed marks.
This requirement ensures that Bang Cookies can verify the costs and that the franchisee receives appropriate reimbursement. It is important for prospective Bang Cookies franchisees to understand that while they will be compensated for these specific costs, they must maintain thorough documentation to facilitate the reimbursement process. This protects both the franchisee and Bang Cookies by ensuring transparency and accountability in the financial transaction.