What is the timeframe a Bang Cookies franchisee has to discharge an involuntary bankruptcy petition filed against them to avoid automatic termination?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
- (d) An involuntary petition in bankruptcy is filed against Franchisee and Franchisee fails to have the involuntary petition discharged within 35 days of the petition filing, and/or Franchisee seeks, consents to, or acquiesces in, the appointment of any trustee, receiver, conservator, custodian or liquidator for Franchisee's business or any assets of Franchisee;
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies' 2024 Franchise Disclosure Document, a franchisee has 35 days to discharge an involuntary bankruptcy petition filed against them. If the franchisee fails to discharge the petition within this timeframe, Bang Cookies has grounds for termination.
This means that if a third party files a bankruptcy petition against a Bang Cookies franchisee, the franchisee must resolve the matter within 35 days to avoid jeopardizing their franchise agreement. This could involve proving the petition is without merit or otherwise resolving the underlying financial issues that led to the filing.
This clause protects Bang Cookies from franchisees who are unable to manage their finances, which could negatively impact the brand's reputation and the performance of other franchisees. Franchisees should be aware of this requirement and take steps to maintain their financial stability to avoid such a situation.