Does Bang Cookies have any restrictions on assigning the Multi-Unit Development Agreement?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
| i. | Franchisee's obligations on termination/non-renewal | 6, 17 | You must: pay all sums that you owe to us under the Franchise Agreement and all other agreements with us; cease owning and operating the Franchised Business; cease representing yourself as a franchisee of ours; permanently cease using and/or accessing the System, the Licensed Marks, our confidential information, the operations manual, the Business Management System, the Business Management System Data, and the System Supplies; return the operations manual and all confidential information to us in the original form provided to you and document the destruction of all electronic files related to same; completely de-identify the location and/or facility associated with the Franchised Business; as requested by us, transfer to us all data, telephone listings, digital media, accounts, web listings and websites associated with the Franchised Business; and abide by the post-termination non-competition covenants and restrictions. |
|---|---|---|---|
| j. | Assignment of the contract by franchisor | 14.A. | No restriction on our right to assign. |
| k. | "Transfer" by franchisee definition | 14.B. | A transfer means and includes, whether voluntary or involuntary, conditional or unconditional, direct or indirect: (a) an assignment, sale, gift, transfer, pledge or sub-franchise; (b) the grant of a mortgage, charge, lien or security interest, including, without limitation, the grant of a collateral assignment; (c) a merger, consolidation, exchange of shares or other ownership interests, issuance of additional ownership interests or securities representing or potentially representing ownership interests, or redemption of ownership interests; and (d) a sale or exchange of voting interests or securities convertible to voting interests, or an agreement granting the right to exercise or control the exercise of the voting rights of any holder of ownership interests or to control the operations or affairs of Franchisee. |
| l. | Franchisor's approval of transfer by franchisee | 14.B. | Transfers require our prior written consent, which may be granted or withheld in our d |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–49)
What This Means (2024 FDD)
The 2024 Franchise Disclosure Document for Bang Cookies outlines the conditions regarding the transfer of agreements. According to Item 17, a transfer includes any assignment, sale, or gift, whether voluntary or involuntary. If a franchisee wants to transfer their agreement, they must obtain prior written consent from Bang Cookies. Bang Cookies has the discretion to grant or withhold this consent.
This stipulation is important for potential multi-unit developers because it means they cannot freely sell or transfer their development rights to another party without Bang Cookies' approval. This gives Bang Cookies control over who enters into agreements and maintains brand standards.
It is typical in franchising for franchisors to have approval rights over franchisee transfers. This allows the franchisor to ensure that any new franchisee meets their operational and financial standards. A prospective Bang Cookies franchisee should carefully consider this requirement and discuss any potential exit strategies with Bang Cookies before signing the Multi-Unit Development Agreement.