Does Bang Cookies have the right to modify an invalid term in the franchise agreement?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
Amendments to the Bang Cookies Franchise Disclosure Document
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- THE STATE 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.
A provision that permits us to refuse to renew a franchise on terms generally available to other Franchisees of the same class or type under similar circumstances.
This section does not require a renewal provision.
- F.
A provision requiring that litigation be conducted outside this state.
This shall not preclude you from entering into an agreement, at the time of litigation, to conduct litigation at a location outside this state.
- G.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, the franchise agreement contains amendments specific to certain states that address the modification of terms.
For example, the Michigan FDD Amendment states that certain unfair provisions that are sometimes in franchise documents are void and cannot be enforced against the franchisee. These provisions include prohibitions on joining franchisee associations, requirements to waive rights and protections, termination without good cause, refusal to renew without fair compensation, refusal to renew on terms available to other franchisees, and requirements for litigation to be conducted outside of Michigan.
Similarly, the Washington State Franchise Agreement Amendment addresses conflicts of law, releases or waivers of rights, transfer fees, and non-competition agreements, noting that certain provisions may not be enforceable under Washington law. The Minnesota Franchise and Development Agreement Amendment supplements articles related to transfer and renewal, ensuring that franchisees retain rights and causes of action under the Minnesota Franchise Act.
These state-specific amendments suggest that Bang Cookies acknowledges the need to modify or render unenforceable terms that conflict with state laws, providing franchisees with additional protections and rights within those jurisdictions.