Under what conditions can Bang Cookies terminate the Multi-Unit Development Agreement without cause?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Sections in Multi-Unit Development Agreement | Summary | |
|---|---|---|---|
| a. | Length of the franchise term | 3 | Varies depending on the number of Shops to be developed and the Development Area. The agreement commences on the effective date and the term automatically expires at the earlier of the opening of the final Shop required for development, or the last day of the calendar month in which the final Shop was required to be open under the Multi-Unit Development Agreement. |
| b. | Renewal or extension of the | Not | There is no renewal of the Multi-Unit Development |
| term | applicable | Agreement. | |
| c. | Requirements for franchisee to renew or extend | Not applicable | There is no renewal of the Multi-Unit Development Agreement. |
| d. | Termination by franchisee | Not applicable | There is no option for your termination of the Multi-Unit Development Agreement. |
| e. | Termination by franchisor | Not | We can terminate without cause only if you and we mutually |
| without cause | applicable | agree, in writing, to terminate. |
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, Bang Cookies can only terminate the Multi-Unit Development Agreement without cause if both parties mutually agree to terminate the agreement in writing. This means Bang Cookies cannot unilaterally terminate the agreement without a specific reason outlined in the agreement unless the franchisee consents to the termination.
This requirement for mutual written consent provides a level of security for the franchisee. It prevents Bang Cookies from arbitrarily ending the development agreement, which could jeopardize the franchisee's investment and plans for developing multiple Bang Cookies locations. The franchisee has the right to refuse termination if they believe Bang Cookies's request is unfair or not in their best interest.
In the franchise industry, it is common for franchise agreements to specify conditions under which either party can terminate the agreement with or without cause. The "cause" usually refers to a breach of contract or failure to meet certain obligations. The Bang Cookies FDD clearly defines the conditions under which Bang Cookies can terminate the agreement with cause, such as abandonment of obligations or failure to meet development schedules. However, the added protection of requiring mutual agreement for termination without cause is a notable aspect of the Bang Cookies Multi-Unit Development Agreement.