After termination of the Bang Cookies agreement, are all payments and obligations accelerated and due immediately?
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)
Based on the 2024 Bang Cookies Franchise Disclosure Document, the franchisee is not entitled to withhold payments from the franchisor under any circumstances, including alleged non-performance or breach of contract by Bang Cookies. The franchisee must continue to make all payments, including royalty fees and advertising contributions, as outlined in the franchise agreement.
Specifically, the FDD states that a franchisee cannot withhold payments due to the franchisor, even if they claim the franchisor isn't fulfilling their obligations. This means a franchisee can't offset any amount they believe Bang Cookies owes them against what they owe Bang Cookies. This applies to royalty fees, advertising contributions, and any other payment obligation.
This clause protects Bang Cookies' revenue stream, ensuring consistent payments regardless of disputes. However, it places a significant financial burden on the franchisee, who must continue paying even if they believe Bang Cookies is in breach of contract. Franchisees need to be aware of this clause and its implications for their cash flow and dispute resolution strategy. Prospective franchisees should seek legal counsel to fully understand their rights and obligations regarding payments to Bang Cookies during the term of the agreement and after termination.