Does Bang Cookies require the spouse of each Owner to personally guarantee the franchisee's obligations under the Franchise Agreement?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
hops then each Shop must be managed and supervised on-site by an Operating Manager.
You and, if you are a Corporate Entity, each of your members, shareholders and/or partners (collectively, "Owners"), must personally guarantee all of your obligations to us under the Franchise Agreement. Each Owner and the spouse of each Owner must personally guarantee your obligations to us under the Franchise Agreement. You and each Owner and spouse must also promise in writing that, among other things, during the term of the Franchise Agreement you will not participate in any business that in any way competes with the Franchised Business, and that for 24 months after the expiration of termination of the Franchise Agreement (with said period being tolled during any periods of non-compliance), neither you nor your Owners and their spouses will participate in any competitive business located within and/or servicing customers located within your Designated Territory and a 25 mile radius surrounding your Designated Territory. Further you will not participate in any competitive business located within and/or servicing customers located within a 10 mile radius of any other Bang Cookies Shop and/or the designated territory of any other Bang Cookies Shop. Your managers and all other employees and agents with access to our confidential information will be required by us to sign a confidentiality agreement.
ITEM 16 RESTRICTIONS ON PRODUCTS AND SERVICES SOLD
You may only sell the Approved Services and Products as specified in the Manuals or otherwise approved by us in writing and may only sell the products and services required by us. We can change the products and services that you must offer, which may include a requirement to participate in fundraising or nonprofit events and programs ("Fundraisers"). If required, Fundraisers may be subject to our standards and specifications or program parameters, such as pricing, as specified in the Manuals from time to time. We reserve the right to designate ourselves as an approved supplier in which we may receive revenue.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 40)
What This Means (2024 FDD)
According to Bang Cookies' 2024 Franchise Disclosure Document, the company mandates that the spouse of each owner must personally guarantee the franchisee's obligations under the Franchise Agreement. This requirement extends to promising in writing not to participate in any business that competes with Bang Cookies during the term of the agreement. This non-compete obligation continues for 24 months after the agreement's expiration or termination, covering the Designated Territory and a 25-mile radius, as well as a 10-mile radius around any other Bang Cookies shop.
This spousal guarantee is further reinforced during the transfer of a franchise. The FDD states that each owner of the transferee, along with their respective spouses, must execute the Franchise Owner and Spouse Agreement and Guaranty. This ensures that all parties are bound by the terms and conditions of the agreement and assume the franchisee's obligations. The spouse must also sign a General Release, releasing Bang Cookies from any claims related to matters arising on or before the transfer's effective date.
This requirement is documented in the Franchise Owner and Spouse Agreement and Guaranty, which is included as Exhibit 1 to the Franchise Agreement. This agreement is not only a guarantee but also includes acknowledgments and representations, such as recognizing access to the Bang Cookies system and intellectual property. By signing, the spouse agrees to brand protection, non-competition covenants, and restrictions, acknowledging that these terms are fair and reasonable.
For a prospective franchisee, this means that their spouse will be legally bound to the financial and operational obligations of the franchise. This is a significant commitment that should be carefully considered, as it could have substantial financial and legal implications for both the franchisee and their spouse. It is advisable to seek legal counsel to fully understand the scope of this guarantee and its potential impact.