Does Bang Cookies review the terms of the lease for a franchisee's Shop Location?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
Lease We do not review the terms of the lease for your Shop Location but require that your landlord acknowledge our rights as set forth in the lease agreement rider attached as Exhibit 4 to the Franchise Agreement (the "Lease Agreement Rider") and that you collaterally assign the lease to us as set forth in the collateral assignment of lease attached as Exhibit 5 to the Franchise Agreement (the "Collateral Assignment of Lease").
We possess the right to disapprove of a proposed lease if the landlord refuses to sign the Lease Agreement Rider in substantially the form set forth in Exhibit 4 to the Franchise Agreement.
The Lease Agreement Rider grants certain rights to us, including our right to be notified in the event of a lease default and, potentially, for us to enter the premises of your Shop.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 24–28)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, Bang Cookies does not review the lease terms for a franchisee's shop location. Instead, Bang Cookies requires that the landlord acknowledge Bang Cookies's rights as outlined in the Lease Agreement Rider, which is attached as Exhibit 4 to the Franchise Agreement. Additionally, the franchisee must collaterally assign the lease to Bang Cookies, as detailed in the Collateral Assignment of Lease attached as Exhibit 5 to the Franchise Agreement. Bang Cookies retains the right to disapprove a proposed lease if the landlord refuses to sign the Lease Agreement Rider in substantially the form set forth in Exhibit 4 to the Franchise Agreement.
The Lease Agreement Rider grants Bang Cookies certain rights, including the right to be notified in the event of a lease default and the potential right for Bang Cookies to enter the premises of the franchisee's shop. This arrangement is not uncommon in franchising, as it allows the franchisor to protect its brand and ensure business continuity if a franchisee defaults on their lease.
Prospective Bang Cookies franchisees should carefully review Exhibits 4 and 5 of the Franchise Agreement to fully understand the rights and obligations outlined in the Lease Agreement Rider and the Collateral Assignment of Lease. Franchisees should also consider consulting with a legal professional to discuss the implications of these documents and how they may affect their business. While Bang Cookies does not review the lease terms, understanding the requirements and restrictions related to the lease is crucial for a franchisee's success.