What right does a Bang Cookies franchisee waive regarding the agreement's terms?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee shall not, on grounds of the alleged nonperformance, material breach, or default by Franchisor of this Agreement, any other agreement between Franchisor and Franchisee, or for any other reason, withhold any payment, fee, or any other amount payable by Franchise to Franchisor pursuant to this Agreement, including, without limitation, the payment of the Royalty Fee and Advertising Contributions, or any other payment obligation by Franchisee to Franchisor. Franchisee shall not have the right to offset or withhold any liquidated or unliquidated amount allegedly due to Franchisee from Franchisor against any payment, fee, or any other amount payable to Franchisor pursuant to this Agreement or any other payment obligation by Franchisee to Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to the 2024 Bang Cookies Franchise Disclosure Document, a franchisee waives the right to offset payments owed to Bang Cookies. This means that a franchisee cannot withhold royalty fees, advertising contributions, or any other payments due to Bang Cookies, even if the franchisee believes Bang Cookies has not performed its obligations under the agreement or has breached the agreement in some way. This waiver applies regardless of the reason the franchisee might claim Bang Cookies owes them money, whether it's a liquidated or unliquidated amount.
In practical terms, this clause heavily favors Bang Cookies. If a franchisee feels that Bang Cookies has failed to provide adequate support, has violated the agreement, or owes the franchisee money for any reason, the franchisee is still obligated to continue making all payments as scheduled. The franchisee cannot deduct or withhold any amount from these payments as a form of compensation or leverage.
The franchisee's only recourse is to pursue legal action to recover any alleged damages or amounts owed by Bang Cookies, while continuing to meet their financial obligations under the franchise agreement. This can create a significant financial burden for the franchisee, as they must pay all required fees while simultaneously funding a legal battle to resolve their grievances. This type of clause is not uncommon in franchise agreements, as it protects the franchisor's revenue stream and ensures consistent payments, regardless of any disputes that may arise. However, it is crucial for prospective franchisees to understand the implications of this waiver and to seek legal counsel to assess the risks involved before signing the agreement.