After termination of a Bang Cookies franchise agreement due to default, are all monetary obligations accelerated and immediately due?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
uting a default under Article 16.A. are in addition to any and all other grounds for default as may be otherwise set forth in the Franchise Agreement. In the event of an event of default of this Agreement by Franchisee under Article 16.A. or, as otherwise set forth in this Agreement, Franchisee agrees that termination of this Agreement is not the sole or exclusive remedy of Franchisor and that Franchisor's right or remedy of termination shall be in addition to any and all other rights set forth in this Agreement, and as otherwise available to Franchisor in law or equity.
Without limitation to the foregoing, additionally, in the event of the termination of this Agreement as a result of a default or breach by Franchisee and/or, by Franchisee's Owners and/or affiliates of any Ancillary Agreements, Franchisor, in addition to any and all other rights and remedies available to Franchisor as set forth in this Agreement, and, at law and in equity, shall possess the following rights and remedies, each of which are not exclusive of the other and may be/are in conjunction with one another:
- (1) To void and terminate this Agreement, and thereafter to market, sell, transfer, convey and assign the rights granted to Franchisee under this Agreement to any other person or entity in Franchisor's sole discretion and without compensation to Franchisee.
- (2) To hold Franchisee and Franchisee's Owners liable for, and recover from each of them, jointly and severally, all payments, fees, monetary obligations, financial obligations, interest, and charges due and owing to Franchisor from Franchisee pursuant to this Agreement, the Ancillary Agreements, and/or any other agreements between Franchisee and Franchisor, including, without limitation, Royalty Fees and Advertising Contributions with each and every payment and obligation to be accelerated and due immediately.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies' 2024 Franchise Disclosure Document, if the Franchise Agreement is terminated due to a default or breach by the franchisee, their owners, or affiliates related to any Ancillary Agreements, Bang Cookies has the right to demand immediate payment of all outstanding financial obligations. This includes all payments, fees, monetary obligations, financial obligations, interest, and charges owed to Bang Cookies. These obligations encompass Royalty Fees and Advertising Contributions, making all such payments immediately due.
In addition to recovering all payments, Bang Cookies can also hold the franchisee and their owners liable for lost revenues, profits, and fees. This includes, but is not limited to, Royalty Fees, Brand Development Fund Fees, Advertising Contributions, and any other fees or expenses that would have been paid to Bang Cookies throughout the term of the agreement had the breach not occurred and the agreement not been terminated.
To calculate these lost revenues and fees, the FDD states that Bang Cookies may use the franchisee's most recent calendar year Gross Sales as a basis. They will assume that this level of Gross Sales would have continued each year for the remainder of the franchise term. This calculation method is deemed fair and reasonable for determining the franchisor's losses resulting from the termination.