Can the Bang Cookies individual unit Franchise Agreement signed under a Multi-Unit Development Agreement differ from the Franchise Agreement included with the Disclosure Document?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
If we approve your request, you may have the option, in addition to signing a Franchise Agreement in the form attached as Exhibit E, to sign the Multi-Unit Development Agreement attached to this Disclosure Document as Exhibit F, to develop and operate multiple Shops. The total number of Shops that you will be required to develop and operate under a Multi-Unit Development Agreement will vary from three to five Shops, as negotiated at the time of signing the Multi-Unit Development Agreement. Each Shop must be developed by you within a designated geographic area (the "Development Area") and each Shop must be developed and operated under the terms of our then current individual unit Franchise Agreement which may differ from the Franchise Agreement included with this Disclosure Document. Your Multi-Unit Development Agreement will include a development schedule (the "Development Schedule") containing a deadline by which you must have each Shop open and operating. Your Development Schedule may vary depending on your Development Area and the number of Shops that you are required to develop.
Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 8–11)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, the individual unit Franchise Agreement signed under a Multi-Unit Development Agreement can indeed differ from the Franchise Agreement included with the Disclosure Document. Specifically, if a franchisee signs a Multi-Unit Development Agreement to develop and operate multiple Bang Cookies shops, the individual unit Franchise Agreements for those shops will be based on the 'then current' version, which may not be the same as the one initially provided in the FDD. This is because the franchise agreement can be updated between the time the development agreement is signed and the time individual units are opened.
This has important implications for prospective multi-unit franchisees. While the initial Franchise Agreement (Exhibit E) provides a baseline understanding, the actual terms governing subsequent Bang Cookies shops could change. These changes could involve alterations to fees, operational requirements, or other key aspects of the franchise relationship. The Multi-Unit Development Agreement will include a development schedule, and each shop must be developed and operated under the terms of the then-current individual unit Franchise Agreement.
Therefore, it is crucial for potential Bang Cookies multi-unit franchisees to understand that the terms of the Franchise Agreement are subject to change. They should discuss with the franchisor what types of changes might occur and how those changes could impact their investment and operations. It would also be prudent to seek legal counsel to review both the initial Franchise Agreement and the Multi-Unit Development Agreement, paying close attention to clauses that allow for modifications or updates to the Franchise Agreement over time.