Does the Bang Cookies franchisor's appointment of a manager relieve the franchisee of their obligations?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
- (3) If, at any time, the Franchised Business is not being managed by a Managing Owner or Operating Manager who satisfactorily completed the Training Program, Franchisor is authorized, but is not required, to immediately appoint a manager to maintain the operations of the Franchised Business for and on behalf of Franchisee. Franchisor's appointment of a manager of the Franchised Business does not relieve Franchisee of its obligations or constitute a waiver of Franchisor's right to terminate the Franchise pursuant to Article 16. Franchisor is not liable for any debts, losses, costs or expenses incurred in the operations of the Franchised Business or to any creditor of Franchisee for any products, materials, supplies or services purchased by the Franchised Business while it is managed by Franchisor's appointed manager. Franchisor has the right to charge fees and expenses, as determined by Franchisor, in Franchisor's Reasonable Business Judgment, for management services (the "Management Service Fees"). Any determination as to whether or not Franchisor may elect to provide management services, if any, and the extent of such services, and/or the discontinuation thereof, shall be exclusively determined by Franchisor in Franchisor's Reasonable Business Judgment. The Management Service Fee shall be immediately payable upon invoice by us.
- (4) Franchisee will at all times maintain sufficient working capital to fulfill its obligations under 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 appointment of a manager by the franchisor does not relieve the franchisee of their obligations. Specifically, if the Franchised Business is not being managed by a Managing Owner or Operating Manager who has satisfactorily completed the Training Program, Bang Cookies is authorized to appoint a manager to maintain operations on behalf of the franchisee. However, this appointment does not waive the franchisee's responsibilities or Bang Cookies's right to terminate the franchise agreement.
Furthermore, the franchisee remains responsible for all debts, losses, costs, and expenses incurred during the period when the appointed manager is in charge. Bang Cookies is not liable to any creditor for products, materials, supplies, or services purchased by the Franchised Business during this time. The franchisee is also responsible for maintaining sufficient working capital to fulfill their obligations under the agreement.
Bang Cookies has the right to charge fees and expenses for these management services, with the amount determined by Bang Cookies in their Reasonable Business Judgment. The decision to provide management services, the extent of those services, and their discontinuation are all determined exclusively by Bang Cookies. These Management Service Fees are payable immediately upon invoicing.