For Bang Cookies, what is the structure of the development schedule outlined in the FDD?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee agrees that to induce Franchisor to enter into this Agreement, Franchisee agrees to develop, establish and operate Development Shops in strict accordance with the requirements of a development schedule (the "Development Schedule"). The Development Schedule, among other things, sets forth and defines each respective measurement period / measurement periods (each, respectively, a "Development Period") and the number of Development Shops that Franchisee must establish and open (a "Newly Opened Development Shop(s)") within the respective Development Period and, the minimum number of cumulative Development Shops (the "Cumulative Development Shops") that must be open and in operation as of the last day of each applicable Development Period.
The Development Schedule is set forth in the Development Information Sheet.
Franchisee agrees that, as to the Development Shops, Franchisee shall meet the requirements of the Development Schedule including, without limitation, requirements as to the number of Development Shops that must be timely developed, established, open, and in operation by Franchisee within the Development Area and as to each respective Development Period.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies' 2024 Franchise Disclosure Document, franchisees who enter into a Multi-Unit Development Agreement must adhere to a development schedule. This schedule, detailed in the Development Information Sheet (Schedule A), specifies the 'Development Period,' which is the measurement period, and the number of 'Newly Opened Development Shops' required within each period. It also defines the 'Cumulative Development Shops' that must be operational by the end of each Development Period. The Development Information Sheet is attached to the agreement and must be completed and signed by Bang Cookies to be effective.
The development schedule is a critical component of the Multi-Unit Development Agreement. Franchisees must open and operate new Bang Cookies locations according to the schedule outlined for each Development Period. Maintaining the minimum cumulative number of open shops is also mandatory. Failure to meet these development obligations can result in immediate termination of the agreement and loss of future development rights.
Bang Cookies grants franchisees limited exclusivity within a 'Development Area,' promising not to open, operate, or license other Bang Cookies shops in that area as long as the franchisee complies with the agreement, including the Development Schedule. Franchisees acknowledge the reasonableness and viability of the Development Schedule, confirming they've independently assessed the prospects for Bang Cookies shops within their Development Area.
Prospective franchisees should carefully review Schedule A, the Development Information Sheet, to fully understand the specific timelines and requirements for opening new locations. They should also conduct thorough due diligence to ensure they can meet the obligations outlined in the Development Schedule, as failure to do so can have significant consequences.