What section of the Bang Cookies FDD covers Term and Termination?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
Item 17, "Renewal, Termination, Transfer and Dispute Resolution," Item 17 is supplemented by the addition of the following:
The Wisconsin Fair Dealership Law Title XIV-A Ch. 135, Section 135.01-135.07 may affect the termination provision of the Franchise Agreement.
Amendments to the Bang Cookies Franchise Disclosure Document
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- Item 17 "Renewal, Termination, Transfer and Dispute Resolution: The Franchise Relationship," is supplemented by the addition of the following:
- C. California Business and Professions Code Sections 20000 through 20043 establish the rights of the franchisee concerning termination, transfer, or non-renewal of a franchise. If the Franchise Agreement contains a provision that is inconsistent with the law, the law will control.
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- Item 17, "Renewal, Termination, Transfer and Dispute Resolution," is supplemented, by the addition of the following:
- A. Indiana Code 23-2-2.7-1(7) makes unlawful unilateral termination of a franchise unless there is a material violation of the Franchise Agreement and termination is not in bad faith.
Item 17, "Renewal, Termination, Transfer and Dispute Resolution," is supplemented, by the addition of the following:
A. The general release required as a condition of renewal, sale, and/or assignment/transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law. 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.
- 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.
3.2 TERMINATION BY FRANCHISOR
Franchisor possesses the right, at Franchisor's option, to terminate this Agreement and all rights granted to Franchisee hereunder, without affording Franchisee with any opportunity to cure such default, effective upon written notice to Franchisee, or automatically upon the occurrence of any of the following events: (a) if Franchisee Abandons Franchisee's obligations under this Agreement; (b) if Franchisee for four consecutive months, or any shorter period that indicates an intent by Franchisee to discontinue Franchisee's development of Shops within the Development Area; (c) if Franchisee becomes insolvent or is adjudicated bankrupt, or if any action is taken by Franchisee, or by others against the Franchisee, under any insolvency, bankruptcy or reorganization act, or if Franchisee makes an assignment for the benefit or creditors or a receiver is appointed by the Franchisee; (d) if Franchisee fails to meet its development obligations under the Development Schedule for any single Development Period including, but not limited to, Franchisee's failure to establish, open and/or maintain the cumulative number of Bang Cookies Shops in accordance with Development Schedule; and/or (e) in the event that any one Franchise Agreement is terminated respecting any Development Shop and/or any other Franchise Agreement between Franchisor and Franchisee.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to the 2024 Bang Cookies Franchise Disclosure Document, Item 17, titled "Renewal, Termination, Transfer and Dispute Resolution," generally covers term and termination. Several state-specific amendments also refer to Item 17, modifying certain provisions to comply with local laws. For example, the California FDD Amendment supplements Item 17 regarding franchisee rights concerning termination, transfer, or non-renewal, noting that California law will control if there are inconsistencies with the Franchise Agreement. Similarly, the Maryland FDD Amendment supplements Item 17, addressing issues such as general releases and the franchisee's right to bring lawsuits in Maryland under the Maryland Franchise Registration and Disclosure Law. The Indiana FDD Amendment also supplements Item 17, specifying conditions under which unilateral termination is unlawful and addressing post-term noncompetition covenants. These amendments highlight the importance of reviewing Item 17 in conjunction with any state-specific addenda to understand the full scope of renewal, termination, transfer, and dispute resolution rights and obligations.
Additionally, the Michigan FDD Amendment included in Item 23 states that the state prohibits certain unfair provisions that are sometimes in franchise documents, including those related to termination. Specifically, it notes that a provision permitting Bang Cookies to terminate a franchise before the expiration of its term is void unless there is good cause, and the franchisee is given written notice and a reasonable opportunity to cure the failure, which need not be more than 30 days. This amendment also addresses provisions related to non-renewal, requiring fair compensation for inventory, supplies, equipment, fixtures, and furnishings under certain conditions. These state-specific amendments in Item 23 further emphasize the need for prospective franchisees to carefully review all relevant sections of the FDD, including state-specific addenda, to fully understand their rights and obligations regarding termination and renewal.
Furthermore, Section 3.2 of the Bang Cookies FDD outlines specific conditions under which Bang Cookies has the right to terminate the agreement without providing an opportunity for the franchisee to cure the default. These conditions include the franchisee abandoning their obligations, indicating an intent to discontinue development of shops within the Development Area for four consecutive months, becoming insolvent or bankrupt, failing to meet development obligations under the Development Schedule, or if any Franchise Agreement is terminated respecting any Development Shop. These termination rights provide Bang Cookies with significant control over the franchise agreement and highlight the importance for franchisees to adhere to the terms and conditions outlined in the agreement to avoid potential termination.