Under what circumstances can Bang Cookies terminate the Multi-Unit Development Agreement due to non-curable defaults?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
| g | "Cause" defined-curable | Not | Not applicable. |
|---|---|---|---|
| defaults | applicable | ||
| h. | "Cause" defined-non curable defaults | 3.2 | Your Multi-Unit Development Agreement can be terminated by us if: (a) you abandon your obligations under the Multi Unit Development Agreement; (b) if you for four consecutive months, or any shorter period that indicates an intent by you to discontinue your development of Shops within the Development Area; (c) if you become insolvent or you are adjudicated bankrupt, or if any action is taken by you, or by others against you, under any insolvency, bankruptcy or reorganization act, or if you make an assignment for the benefit or creditors or a receiver is appointed by you; (d) if you fail to meet your development obligations under the Development Schedule for any single Development Period including, but not limited to, your failure to establish, open and/or maintain the cumulative number of Shops in accordance with Development Schedule; and/or (e) in the event that any one Franchise Agreement is terminated respecting any Shop and/or any other Franchise Agreement with us. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–49)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, the franchisor can terminate the Multi-Unit Development Agreement under specific non-curable default circumstances. These circumstances include abandonment of obligations, discontinuing development of shops, insolvency or bankruptcy, failure to meet development obligations, or termination of a Franchise Agreement.
Specifically, Bang Cookies can terminate the agreement if the franchisee abandons their obligations, discontinues shop development for four consecutive months (or a shorter period indicating intent to discontinue), becomes insolvent or bankrupt, fails to meet development obligations under the Development Schedule, or if any single Franchise Agreement is terminated. These are considered non-curable defaults, meaning the franchisee does not have an opportunity to correct the issue.
For a prospective Bang Cookies multi-unit franchisee, this means that strict adherence to the development schedule and maintaining financial stability are critical. Failure to meet these obligations can result in the termination of the Multi-Unit Development Agreement. The franchisee loses all rights under the Multi-Unit Development Agreement upon termination, and there are no renewal rights.