factual

Does Bang Cookies have an option to purchase a franchisee's business upon termination of the Multi-Unit Development Agreement?

Bang_Cookies Franchise · 2024 FDD

Answer from 2024 FDD Document

our Owners must be in compliance with your obligations under |

| n. | Franchisor's right of first refusal to acquire franchisee's business | 14.F. | We have the right to match any offer to purchase your Shop or the Corporate Entity operating your Shop. | |----|------------------------------------------------------------------------------|-------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | o. | Franchisor's option to purchase franchisee's business | Not applicable | Not applicable. | | p. | Death or disability of franchisee | 14.D. | If you are an individual, within 30 days of the death or permanent disability of Franchisee, your executor and/or legal representative must appoint an Operating Manager approved by us and within 60 days of such appointment the Operating Manager must complete, to our satisfaction, our initial training program. Within 12 months of the date of death or disability, the Franchise Agreement must be transferred to a transferee approved by us and otherwise transferred in accordance with the terms of the Franchise Agreement. If the franchisee is a Corporate Entity, within 30 days of the death or permanent disability of your Managing Owner, if there are other Owners, must appoint a replacement Operating Manager approved by us and within 60 days of such appointment the replacement Operating Manager must complete, to our satisfaction, our initial training program. | | q. | Non-competition covenants during the term of the franchise | 6 | No involvement in any competitive business and must comply with confidentiality, non-disclosure and non-solicitation covenants. | | r. | Non-competition covenants after the franchise is terminated or expires | 6, 17.C. | No involvement, ownership or interest whatsoever for 24 months in any competing business in: your Designated Territory; a 25-mile radius of your Designated Territory; a 10- mile radius of the Designated Territory of any other Shop; and you must comply with confidentiality, non-disclosure and non solicitation covenants. |

| s. | Modification of the agreement | 18.L. | Requires writing signed by you and us, except for unilateral changes that we may make to the Manuals or our unilateral reduction of the scope of a restrictive covenant that we may make in our discretion. | |----|---------------------------------------------------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | t. | Integration/merger clauses | 18.M. | Only the terms of the Franchise Agreement and schedules to the Franchise Agreement and the respective signed exhibits to the Franchise Agreement are binding, subject to state law. Nothing in any agreement is intended to disclaim the express representations made in the Franchise Disclosure Document, its exhibits and amendments. | | u. | Dispute resolution by arbitration or mediation | 18.G. | Except for certain claims for injunctive relief, all disputes must first be submitted to non-binding mediation in Bergen County, New Jersey and, if mediation is unsuccessful, then to binding arbitration in Bergen County, New Jersey. This provision is subject to applicable state law. | | v. | Choice of forum | 18.G. | All mediation, arbitration and, if applicable, litigation proceedings must be conducted in, or closest to, State court of general jurisdiction that is within or closest to Bergen County, New Jersey. This provision is subject to applicable state law. | | w. | Choice of law | 18.F. | New Jersey law will govern. However, this provision is subject to state law and as otherwise disclosed in Exhibit I to this Disclosure Document. | [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

The Franchise Relationship Under a Multi-Unit Development Agreement

THE FRANCHISE RELATIONSHIP

**This table lists certain important provisions of the Franchise and related agreements.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–49)

What This Means (2024 FDD)

According to Bang Cookies's 2024 Franchise Disclosure Document, Bang Cookies does not have the option to purchase a franchisee's business upon termination of the Multi-Unit Development Agreement. The FDD states this explicitly in Item 17. However, Bang Cookies does have the right of first refusal to acquire a franchisee's shop or the corporate entity operating the shop, meaning that if a franchisee receives an offer to purchase their business, Bang Cookies has the right to match that offer.

This distinction is important for prospective franchisees to understand. While Bang Cookies cannot simply decide to buy a franchisee's business, they do have the power to prevent a franchisee from selling to another buyer if Bang Cookies is willing to match the offer. This could potentially limit a franchisee's options when they decide to sell their business.

It is also important to note that the non-competition covenants outlined in the Franchise Agreement will apply to each shop developed under the Multi-Unit Development Agreement. These covenants restrict the franchisee's involvement in any competing business during the term of the franchise and for a period of time after termination or expiration of the franchise agreement. Specifically, franchisees cannot have any involvement, ownership, or interest in a competing business for 24 months in their Designated Territory; a 25-mile radius of their Designated Territory; and a 10- mile radius of the Designated Territory of any other Shop. Franchisees must also comply with confidentiality, non-disclosure, and non-solicitation covenants.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.