Can Bang Cookies refuse to renew a franchise agreement?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS. IF ANY OF THE FOLLOWING PROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE PROVISIONS ARE VOID AND CANNOT BE ENFORCED AGAINST YOU.
- A. A prohibition of your right to join an association of Franchisees.
- B. A requirement that you assent to a release, assignment, novation, waiver or estoppel that deprives you of rights and protections provided in this act. This shall not preclude you, after entering into a Franchise Agreement, from settling any and all claims.
- C. A provision that permits us to terminate a franchise before the expiration of this term except for good cause. Good cause shall include your failure to comply with any lawful provision of the Franchise Agreement and to cure the failure after being given written notice of the failure and a reasonable opportunity, which in no event need be more than 30 days, to cure the failure.
- D. A provision that permits us to refuse to renew a franchise without fairly compensating you by repurchase or other means for the fair market value at the time of expiration of your inventory, supplies, equipment, fixtures and furnishings. Personalized materials that have no value to us and inventory, supplies, equipment, fixtures and furnishings not reasonably required in the conduct of the franchise business are not subject to compensation. This subsection applies only if: (a) the term of the franchise is less than five years, and (b) you are prohibited by the Franchise Agreement or other agreement from continuing to conduct substantially the same business under another trademark, service mark, trade name, logotype, advertising or other commercial symbol in the same area subsequent to the expiration of the franchise or you do not receive at least six months advance notice of our intent not to renew the franchise.
- E.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to the 2024 Bang Cookies Franchise Disclosure Document, the franchisor's ability to refuse renewal of a franchise agreement is subject to certain state laws. For instance, Michigan law stipulates that Bang Cookies cannot refuse to renew a franchise without fairly compensating the franchisee for the fair market value of their inventory, supplies, equipment, fixtures, and furnishings at the time of expiration. This protection applies if the franchise term is less than five years and the franchisee is restricted from operating a similar business in the same area after the franchise expires, or if the franchisee does not receive at least six months' advance notice of non-renewal. Furthermore, Bang Cookies cannot refuse renewal on terms not generally available to other franchisees in similar circumstances. However, this section does not mandate a renewal provision.
In Minnesota, franchisees are entitled to certain termination and non-renewal rights under Minn. Stat. Sect. 80C.14 Subdivisions 3, 4, and 5, which generally require Bang Cookies to provide 180 days' notice of nonrenewal, except in specific cases. Similarly, the Hawaii Franchise Investment Law provides franchisees with rights concerning non-renewal, and this law will take precedence if any provision in the franchise agreement is inconsistent with it.
In Illinois, the Franchise Disclosure Act outlines franchisee rights upon termination and non-renewal. Prospective franchisees should carefully review these state-specific amendments to understand their rights and Bang Cookies' obligations regarding franchise renewal, as these laws can significantly impact the terms and conditions under which a franchise can be renewed or non-renewed.