What section of the Bang Cookies FDD covers the Development Area Fee for a Bang Cookies franchise?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
SECTION 4 DEVELOPMENT AREA FEE, INITIAL FEES AND DEVELOPMENT SCHEDULE
4.1 DEVELOPMENT AREA FEE
In exchange for the rights set forth and granted pursuant to the terms of this Agreement, upon execution of this Agreement, Franchisee shall pay to Franchisor a development area fee (the "Development Area Fee"). The Development Area Fee is not refundable.
The amount of the Development Area Fee is set forth in the Development Information Sheet.
Franchisee agrees that the Development Area Fee is not a franchise fee and, that at the time of signing each respective Franchise Agreement, Franchisee shall pay to Franchisor an initial franchise fee and all other fees in accordance with the terms and conditions of each respective Franchise Agreement, except that the initial franchise fee shall conform to the amounts set forth in Section 4.2 of this Agreement. If the then current standard Franchise Agreement to be signed by the Franchisee respecting a Development Shop to be
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, Section 4.1 covers the Development Area Fee. This section specifies that the franchisee must pay a Development Area Fee upon execution of the agreement in exchange for the rights granted. The FDD clearly states that this fee is non-refundable. The specific amount of the Development Area Fee is detailed in the Development Information Sheet, which is a separate document.
This means that a prospective Bang Cookies multi-unit franchisee will need to refer to the Development Information Sheet to determine the exact cost of the Development Area Fee. This fee is separate from the initial franchise fee required for each individual Bang Cookies shop they plan to open within the development area. The initial franchise fee is paid when signing each respective Franchise Agreement.
It is important for potential Bang Cookies franchisees to understand that the Development Area Fee is not a franchise fee and is non-refundable. This fee secures the rights to develop Bang Cookies shops within a specific area, but it does not cover the costs associated with opening and operating each individual shop. Franchisees must also meet development obligations as per the Development Schedule, or risk termination of the agreement.