Are the Bang Cookies Franchisee's Owners liable for Advertising Contributions after termination?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee shall not, on grounds of the alleged nonperformance, material breach, or default by Franchisor of this Agreement, any other agreement between Franchisor and Franchisee, or for any other reason, withhold any payment, fee, or any other amount payable by Franchise to Franchisor pursuant to this Agreement, including, without limitation, the payment of the Royalty Fee and Advertising Contributions, or any other payment obligation by Franchisee to Franchisor. Franchisee shall not have the right to offset or withhold any liquidated or unliquidated amount allegedly due to Franchisee from Franchisor against any payment, fee, or any other amount payable to Franchisor pursuant to this Agreement or any other payment obligation by Franchisee to Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
Based on the 2024 Bang Cookies Franchise Disclosure Document, a franchisee is not entitled to withhold payments, including Advertising Contributions, due to Bang Cookies under any circumstances, even if the franchisee claims non-performance by Bang Cookies. Specifically, the FDD states that any claim by the franchisee regarding Bang Cookies' alleged non-performance does not permit the franchisee to withhold payments that are due. This includes, but is not limited to, Royalty Fees and Advertising Contributions.
Furthermore, the Bang Cookies franchise agreement explicitly states that the franchisee does not have the right to offset or withhold any amount allegedly due from Bang Cookies against any payment owed to Bang Cookies. This applies to any payment, fee, or amount payable to Bang Cookies, including Royalty Fees and Advertising Contributions. This means that even if a franchisee believes Bang Cookies owes them money for any reason, they are still obligated to continue making all payments as required by the franchise agreement.
This requirement ensures that Bang Cookies maintains a consistent revenue stream, regardless of any disputes that may arise with individual franchisees. It also places the onus on the franchisee to resolve any disputes through appropriate legal channels while continuing to meet their financial obligations to Bang Cookies. This is a fairly standard clause in franchise agreements, designed to protect the franchisor's income and operational stability.