If a Bang Cookies franchisee enters into a Multi-Unit Development Agreement, how do the fees apply?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
Note 1: Type of Fee – The above table describes fees and payments that you must pay to us, our affiliates, or that our affiliates may impose or collect on behalf of a third party. All fees are uniformly imposed for all franchises offered under this Disclosure Document, are recurring, are not refundable, and are payable to us, unless otherwise specified. If you enter into a Multi-Unit Development Agreement or open multiple Shops then these fees shall apply, respectively, to each and every Shop. Payment is subject to our specification and instruction, including, our election to have all fees automatically drafted from your business bank account or automatically debited or charged to your business bank account. You will be required to sign an ACH Authorization Form (Franchise Agreement, Exhibit 7) permitting us to electronically debit your designated bank account for payment of all fees payable to us and/or our affiliates. You must deposit the Gross Sales of your Shop into the designated bank accounts that are subject to our ACH authorization. You must install and use, at your expense, the pre-authorized payment, point of sale, credit card processing, automatic payment, automated banking, electronic debit and/or electronic funds transfer systems that we designate and require in the operation of your Shop. You must pay all service charges and fees charged to you by your bank so that we may electronically debit your bank account.
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, if a franchisee enters into a Multi-Unit Development Agreement or opens multiple shops, the fees outlined in the document apply to each and every shop. This means that for each Bang Cookies location operated under the agreement, the franchisee will be responsible for paying the specified fees. These fees are uniformly imposed for all franchises and are generally recurring and non-refundable, unless otherwise specified. Payment is subject to Bang Cookies's specifications and instructions, including the option to have fees automatically drafted from the franchisee's business bank account.
Bang Cookies requires franchisees to sign an ACH Authorization Form, which permits the company to electronically debit the franchisee's designated bank account for all fees payable to Bang Cookies and its affiliates. Franchisees must deposit the gross sales of their shop into designated bank accounts that are subject to this ACH authorization. Additionally, franchisees are required to install and use pre-authorized payment, point-of-sale, credit card processing, automatic payment, automated banking, electronic debit, and/or electronic funds transfer systems designated by Bang Cookies. Franchisees are responsible for covering all service charges and fees charged by their bank to facilitate these electronic debits.
Several other fees are described in the FDD. The royalty fee is a continuing weekly fee equal to 6% of your weekly Gross Sales. The brand development fund fee is a continuing weekly fee equal to an amount of up to 2% of your weekly Gross Sales, but currently Bang Cookies does not charge this fee but reserves the right to implement one at any time in the future. On an on-going calendar year quarterly basis, you must spend not less than 2% of your quarterly Gross Sales on the local marketing of your Shop within your designated territory. The continuing monthly technology fee is currently $200 per month.
This policy ensures that Bang Cookies receives the necessary payments from each location operating under a Multi-Unit Development Agreement, supporting the brand's overall financial health and operational consistency. Prospective franchisees should carefully consider these fee obligations for each shop they plan to open, as these costs will directly impact their profitability and financial planning.