Baya_Bar 2024 Franchise FAQ - FDD Ninja

Question 1

What is the Developer acknowledging when initialing the Developer Acknowledgement Statement for Baya Bar?

Accepted Answer

Y TO ANY CLAIMS ARISING FROM REPRESENTATIONS MADE BY FRANCHISOR IN FRANCHISOR'S FRANCHISE DISCLOSURE DOCUMENT RECEIVED BY FRANCHISEE.

|                          |                 | Initial |
|--------------------------|-----------------|---------|
| Acknowledged this day of |  |  |
| PRINCIPAL: | FRANCHISEE: |  |
| Signature | By: |  |
| Name: | Name: Title: |  |
![](_page_184_Picture_0.jpeg)

#### **EXHIBIT H-2**

## **DEVELOPER ACKNOWLEDGEMENT STATEMENT**

Developer hereby acknowledges the following:

1. Developer has conducted an independent investigation of all aspects relating to the financial, operational and other aspects of the business of developing the Baya Bar outlets contemplated hereunder. Developer further acknowledges that, except as may be set forth in Franchisor's Disclosure Document, no representations of performance (financial or otherwise) for the Baya Bar outlets to be developed hereunder has been made to Developer by Franchisor and Developer hereby waives any claim against Franchisor for any business failure Developer may experience as a developer under this Agreement.

> \_\_\_\_\_ Initial

2. Developer agrees that no claims of success or failure have been made to him or her prior to signing this Agreement and that he/she understands all the terms and conditions of this Agreement. Developer further acknowledges that this Agreement contains all oral and written agreements, representations and arrangements between the parties hereto, and any rights which the respective parties hereto may have had under any other previous contracts are hereby cancelled and terminated, and that this Agreement cannot be changed or terminated orally; provided, however, nothing in this Multi-Unit Development Agreement or in any related agreement is intended to disclaim the representations made to Developer in Franchisor's Franchise Disclosure Document.

> \_\_\_\_\_ Initial

3. Developer has no knowledge of any representations by Franchisor or its officers, directors, shareholders, employees, sales representatives, agents or servants, about the business contemplated by this Agreement that are contrary to the terms of this Agreement or the documents incorporated herein. Developer acknowledges that no representations or warranties are made or implied, except as specifically set forth herein. Developer represents, as an inducement to Franchisor's entry into this Agreement, that Developer has made no misrepresentations in obtaining this Agreement.

> \_\_\_\_\_ Initial

4. Franchisor expressly disclaims the making of, and Developer acknowledges that it has not received or relied upon, any warranty or guarantee, express or implied, as to the potential volume, profits or success of the business venture contemplated by this Agreement.

> \_\_\_\_\_ Initial

5. Developer acknowledges that he/she has received the Baya Bar Franchise Systems, LLC Franchise Disclosure Document with a complete copy of this Agreement and all related Exhibits and

![](_page_185_Picture_0.jpeg)

agreements at least fourteen (14) calendar days prior to the date on which this Agreement was executed. Developer further acknowledges that Developer has read such Franchise Disclosure Document and understands its contents.

> \_\_\_\_\_ Initial

6. Developer acknowledges that he/she has had ample opportunity to consult with his/her own attorneys, accountants and other advisors and that the attorneys for Franchisor have not advised or represented Developer with respect to this Agreement or the relationship thereby created.

> \_\_\_\_\_ Initial

7. Developer, together with Developer's advisers, has sufficient knowledge and experience in financial and business matters to make an informed investment decision with respect to the development rights granted by this Agreement.

> \_\_\_\_\_ Initial

8.

Source: Item 23 — RECEIPTS (FDD pages 56–189)

Question 2

How many Baya Bar franchise agreements were not renewed in 2021?

Accepted Answer

| State     | Year | Outlets at Start of Year | Outlets Opene d | Termina -tions | Non Renewal s | Reacquired by Franchisor | Ceased Operations – Other Reasons | Outlets at End of the Year |
|-----------|------|--------------------------------|-----------------------|-------------------|---------------------|--------------------------------|--------------------------------------------|-------------------------------------|
| Louisiana | 2021 | 2                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 2                                   |
|           | 2022 | 2                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 2                                   |
|           | 2023 | 2                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 2                                   |
| Nevada    | 2021 | 1                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 1                                   |
|           | 2022 | 1                              | 0                     | 0                 | 0                   | 0                              | 1                                          | 0                                   |
|           | 2023 | 0                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 0                                   |
| New York  | 2021 | 4                              | 5                     | 0                 | 0                   | 0                              | 0                                          | 9                                   |
|           | 2022 | 9                              | 5                     | 0                 | 0                   | 0                              | 0                                          | 14                                  |
|           | 2023 | 14                             | 6                     | 0                 | 0                   | 0                              | 0                                          | 20                                  |
|           | 2021 | 0                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 0                                   |
| Utah      | 2022 | 0                              | 1                     | 0                 | 0                   | 0                              | 0                                          | 1                                   |
|           | 2023 | 1                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 1                                   |
| Total     | 2021 | 7                              | 5                     | 0                 | 0                   | 0                              | 0                                          | 12                                  |
|           | 2022 | 12                             | 7                     | 1                 | 0                   | 0                              | 0                                          | 17                                  |
|           | 2023 | 17                             | 6                     | 0                 | 0                   | 0                              | 0                                          | 23

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 53–55)

Question 3

How many Baya Bar franchise agreements were terminated in 2022?

Accepted Answer

| State | Year | Outlets at Start of Year | Outlets Opene d | Termina -tions | Non Renewal s | Reacquired by Franchisor | Ceased Operations – Other Reasons | Outlets at End of the Year |
|-----------|------|--------------------------------|-----------------------|-------------------|---------------------|--------------------------------|--------------------------------------------|-------------------------------------|
| Louisiana | 2021 | 2                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 2                                   |
|           | 2022 | 2                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 2                                   |
|           | 2023 | 2                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 2                                   |
| Nevada    | 2021 | 1                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 1                                   |
|           | 2022 | 1                              | 0                     | 0                 | 0                   | 0                              | 1                                          | 0                                   |
|           | 2023 | 0                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 0                                   |
| New York  | 2021 | 4                              | 5                     | 0                 | 0                   | 0                              | 0                                          | 9                                   |
|           | 2022 | 9                              | 5                     | 0                 | 0                   | 0                              | 0                                          | 14                                  |
|           | 2023 | 14                             | 6                     | 0                 | 0                   | 0                              | 0                                          | 20                                  |
|           | 2021 | 0                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 0                                   |
| Utah      | 2022 | 0                              | 1                     | 0                 | 0                   | 0                              | 0                                          | 1                                   |
|           | 2023 | 1                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 1                                   |
| Total     | 2021 | 7                              | 5                     | 0                 | 0                   | 0                              | 0                                          | 12                                  |
|           | 2022 | 12                             | 7                     | 1                 | 0                   | 0                              | 0                                          | 17                                  |
|           | 2023 | 17                             | 6                     | 0                 | 0                   | 0                              | 0                                          | 23                                  |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 53–55)

Question 4

How many Baya Bar outlets were not renewed across all states in 2021?

Accepted Answer

|---------------------|
| Total | 2021 | 0                   |
|       | 2022 | 0                   |
|       | 2023 | 0                   |

## **Table No. 3 Status of Franchised Outlets For years 2021 to 2023**

| State     | Year | Outlets at Start of Year | Outlets Opene d | Termina -tions | Non Renewal s | Reacquired by Franchisor | Ceased Operations – Other Reasons | Outlets at End of the Year |
|-----------|------|--------------------------------|-----------------------|-------------------|---------------------|--------------------------------|--------------------------------------------|-------------------------------------|
| Louisiana | 2021 | 2                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 2                                   |
|           | 2022 | 2                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 2                                   |
|           | 2023 | 2                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 2                                   |
| Nevada    | 2021 | 1                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 1                                   |
|           | 2022 | 1                              | 0                     | 0                 | 0                   | 0                              | 1

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 53–55)

Question 5

What is the total estimated initial investment for a Baya Bar franchise, including the development fee and other expenditures for the first shop?

Accepted Answer

| (1) Type of Expenditure | (2) Amount | (3) Method of Payment | (4) When Due | (5) To Whom Payment is to be Made |
|---|---|---|---|---|
| Development Fee (1) | $62,500 | Lump Sum | On signing Multi-Unit Development Agreement | Us |
| Other Expenditures | $174,415 to $435,400 | See First Table | See First Table | See First Table |
| for First Shop(2) |  |  |  |  |
| Total | $226,915 to $487,900 |  |  |  |

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 16–20)

Question 6

What is the total number of classroom training hours provided for a Baya Bar franchise?

Accepted Answer

| Subject                                                                                                                                                                                                   | Hours of Classroom Training | Hours of On-the-Job Training | Location                                                                                     |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|------------------------------------|----------------------------------------------------------------------------------------------|
| Baya Bar Business Model Concept  Introduction & Familiarization  Value Proposition & Competition  Strategic Relationship Between Franchisor, Franchisee and Vendor | 4                                 | 0                                  | Our affiliate's Forest Avenue location in Staten Island, New York, or your location |
| Marketing and Lead Generation  Marketing Strategies  Promoting the Brand  Business Credibility Building  Converting Walk-In Traffic                                  | 4                                 | 0                                  | Our affiliate's Forest Avenue location in Staten Island, New York, or your location |
| Office Administration  Contracts Administration  Accounting and Order Processing  Managing Cash and Transactions                                                            | 4                                 | 0                                  | Our affiliate's Forest Avenue location in Staten Island, New York, or your location |
| Managing the Operation  Employees  Food Quality  Inventory Management  Day to Day Operations  POS System                                                         | 24                                | 24                                 | Our affiliate's Forest Avenue location in Staten Island, New York, or your location |
| Customer Interaction  Credibility Building  Understanding Product Types & Pricing                                                                                                     | 2                                 | 5                                  | Our affiliate's Forest Avenue location in Staten Island, New York, or your location |

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 26–36)

Question 7

What was the total number of Baya Bar franchise terminations across all states in 2023?

Accepted Answer

| State     | Year | Outlets at Start of Year | Outlets Opene d | Termina -tions | Non Renewal s | Reacquired by Franchisor | Ceased Operations – Other Reasons | Outlets at End of the Year |
|-----------|------|--------------------------------|-----------------------|-------------------|---------------------|--------------------------------|--------------------------------------------|-------------------------------------|
| Louisiana | 2021 | 2                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 2                                   |
|           | 2022 | 2                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 2                                   |
|           | 2023 | 2                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 2                                   |
| Nevada    | 2021 | 1                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 1                                   |
|           | 2022 | 1                              | 0                     | 0                 | 0                   | 0                              | 1                                          | 0                                   |
|           | 2023 | 0                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 0                                   |
| New York  | 2021 | 4                              | 5                     | 0                 | 0                   | 0                              | 0                                          | 9                                   |
|           | 2022 | 9                              | 5                     | 0                 | 0                   | 0                              | 0                                          | 14                                  |
|           | 2023 | 14                             | 6                     | 0                 | 0                   | 0                              | 0                                          | 20                                  |
|           | 2021 | 0                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 0                                   |
| Utah      | 2022 | 0                              | 1                     | 0                 | 0                   | 0                              | 0                                          | 1                                   |
|           | 2023 | 1                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 1                                   |
| Total     | 2021 | 7                              | 5                     | 0                 | 0                   | 0                              | 0                                          | 12                                  |
|           | 2022 | 12                             | 7                     | 1                 | 0                   | 0                              | 0                                          | 17                                  |
|           | 2023 | 17                             | 6                     | 0                 | 0                   | 0                              | 0                                          | 23                                  |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 53–55)

Question 8

What is the total number of on-the-job training hours provided for a Baya Bar franchise?

Accepted Answer

| Subject                                                                                                                                                                                                   | Hours of Classroom Training | Hours of On-the-Job Training | Location                                                                                     |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|------------------------------------|----------------------------------------------------------------------------------------------|
| Baya Bar Business Model Concept  Introduction & Familiarization  Value Proposition & Competition  Strategic Relationship Between Franchisor, Franchisee and Vendor | 4                                 | 0                                  | Our affiliate's Forest Avenue location in Staten Island, New York, or your location |
| Marketing and Lead Generation  Marketing Strategies  Promoting the Brand  Business Credibility Building  Converting Walk-In Traffic                                  | 4                                 | 0                                  | Our affiliate's Forest Avenue location in Staten Island, New York, or your location |
| Office Administration  Contracts Administration  Accounting and Order Processing  Managing Cash and Transactions                                                            | 4                                 | 0                                  | Our affiliate's Forest Avenue location in Staten Island, New York, or your location |
| Managing the Operation  Employees  Food Quality  Inventory Management  Day to Day Operations  POS System                                                         | 24                                | 24                                 | Our affiliate's Forest Avenue location in Staten Island, New York, or your location |
| Customer Interaction  Credibility Building  Understanding Product Types & Pricing                                                                                                     | 2                                 | 5                                  | Our affiliate's Forest Avenue location in Staten Island, New York, or your location |

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 26–36)

Question 9

What was the total number of Baya Bar outlets at the end of 2023 across all states?

Accepted Answer

| Outlet Type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---|
| Franchised | 2021 | 6 | 12 | +6 |
|  | 2022 | 12 | 17 | +5 |
|  | 2023 | 17 | 23 | +6 |
| Company- | 2021 | 3 | 3 | 0 |
| Owned* |  |  |  |  |
|  | 2022 | 3 | 3 | 0 |
|  | 2023 | 3 | 3 | 0 |
| Total Outlets | 2021 | 9 | 15 | +6 |
|  | 2022 | 15 | 20 | +5 |
|  | 2023 | 20 | 26 | +6 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 53–55)

Question 10

What was the total number of Baya Bar outlets opened during 2022 across all states?

Accepted Answer

| State     | Year | Outlets at Start of Year | Outlets Opene d | Termina -tions | Non Renewal s | Reacquired by Franchisor | Ceased Operations – Other Reasons | Outlets at End of the Year |
|-----------|------|--------------------------------|-----------------------|-------------------|---------------------|--------------------------------|--------------------------------------------|-------------------------------------|
| Louisiana | 2021 | 2                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 2                                   |
|           | 2022 | 2                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 2                                   |
|           | 2023 | 2                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 2                                   |
| Nevada    | 2021 | 1                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 1                                   |
|           | 2022 | 1                              | 0                     | 0                 | 0                   | 0                              | 1                                          | 0                                   |
|           | 2023 | 0                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 0                                   |
| New York  | 2021 | 4                              | 5                     | 0                 | 0                   | 0                              | 0                                          | 9                                   |
|           | 2022 | 9                              | 5                     | 0                 | 0                   | 0                              | 0                                          | 14                                  |
|           | 2023 | 14                             | 6                     | 0                 | 0                   | 0                              | 0                                          | 20                                  |
|           | 2021 | 0                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 0                                   |
| Utah      | 2022 | 0                              | 1                     | 0                 | 0                   | 0                              | 0                                          | 1                                   |
|           | 2023 | 1                              | 0                     | 0                 | 0                   | 0                              | 0                                          | 1                                   |
| Total     | 2021 | 7                              | 5                     | 0                 | 0                   | 0                              | 0                                          | 12                                  |
|           | 2022 | 12                             | 7                     | 1                 | 0                   | 0                              | 0                                          | 17                                  |
|           | 2023 | 17                             | 6                     | 0                 | 0                   | 0                              | 0                                          | 23                                  |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 53–55)

Question 11

What was the total number of Baya Bar outlets at the start of 2022 across all states?

Accepted Answer

| Outlet Type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---|
| Franchised | 2021 | 6 | 12 | +6 |
|  | 2022 | 12 | 17 | +5 |
|  | 2023 | 17 | 23 | +6 |
| Company- | 2021 | 3 | 3 | 0 |
| Owned* |  |  |  |  |
|  | 2022 | 3 | 3 | 0 |
|  | 2023 | 3 | 3 | 0 |
| Total Outlets | 2021 | 9 | 15 | +6 |
|  | 2022 | 15 | 20 | +5 |
|  | 2023 | 20 | 26 | +6 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 53–55)

Question 12

What was the total number of Baya Bar outlets at the start of 2023?

Accepted Answer

| Outlet Type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---|
| Franchised | 2021 | 6 | 12 | +6 |
|  | 2022 | 12 | 17 | +5 |
|  | 2023 | 17 | 23 | +6 |
| Company- | 2021 | 3 | 3 | 0 |
| Owned* |  |  |  |  |
|  | 2022 | 3 | 3 | 0 |
|  | 2023 | 3 | 3 | 0 |
| Total Outlets | 2021 | 9 | 15 | +6 |
|  | 2022 | 15 | 20 | +5 |
|  | 2023 | 20 | 26 | +6 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 53–55)

Question 13

What is the total projected number of new franchised Baya Bar outlets expected to open in the next fiscal year across all states listed?

Accepted Answer

| States        | Franchise Agreements Signed But Outlet Not Opened | Projected New Franchised Outlets in the Next Fiscal Year | Projected New Company-Owned Outlets in the Next Fiscal Year |
|---------------|------------------------------------------------------------|----------------------------------------------------------------|----------------------------------------------------------------------|
| Utah          | 0                                                          | 2                                                              | 0                                                                    |
| Pennsylvania  | 0                                                          | 2                                                              | 0                                                                    |
| New York      | 1                                                          | 6                                                              | 0                                                                    |
| Florida       | 0                                                          | 2                                                              | 0                                                                    |
| Massachusetts | 2                                                          | 0                                                              | 0                                                                    |
| Wisconsin     | 2                                                          | 0                                                              | 0                                                                    |
| Total         | 5                                                          | 12                                                             | 0                                                                    |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 53–55)

Question 14

In the years 2021, 2022, and 2023, how many Baya Bar outlets were reacquired from franchisees?

Accepted Answer

| State | Year | Outlets at Start of Year | Outlets Opened | Outlets Reacquired from Franchisee | Outlets Closed | Outlets Sold to Franchisee | Outlets at End of the Year |
|-------|------|--------------------------------|-------------------|---------------------------------------------|-------------------|----------------------------------|----------------------------------|
| Total | 2021 | 3 | 0 | 0 | 0 | 0 | 3 |
|  | 2022 2023 | 3 3 | 0 | 0 | 0 | 0 | 3 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 53–55)

Question 15

What are all the fees a Baya Bar franchisee might pay, combining the initial fees in Item 5 and the other fees in Item 6?

Accepted Answer

#### **ITEM 5 INITIAL FEES**

**Franchise Agreement**: You must pay us an initial franchise fee of \$35,000 for the right to establish a single Baya Bar Shop under a Franchise Agreement. This fee is used in part for working capital and in part for profit. If you are purchasing your second Shop, the initial franchise fee will be reduced to \$30,000, and if you are purchasing your third or later Shop, the initial franchise fee will be reduced to \$25,000. The initial franchise fee is imposed uniformly on all franchisees.

If (a) you fail to complete the pre-opening training program to our satisfaction, after having given you the opportunity to re-take our pre-opening training program at your expense or (b) we conclude, no more than ten days after you complete the pre-opening training program, that you do not have the ability to satisfactorily operate your Franchised Business, then we have the right to terminate your Franchise Agreement. If we terminate your Franchise Agreement, we will refund your initial franchise fee less any out-of-pocket costs we have incurred. You must sign any documents we require, including a confidentiality agreement and general release, before any money will be refunded to you. The initial franchise fee is not refundable under any other circumstances.

**Multi-Unit Development Agreement**: If you and we agree that you will develop and operate multiple Baya Bar Franchised Businesses, then you will pay to us a development fee equal to 100% of the initial franchise fee for the first Shop to be developed, plus 50% of the reduced initial franchise fee for each additional Shop you commit to develop under the MUDA. For example, if you commit to develop three Shops, the development fee is calculated as \$35,000 + (50% of \$30,000=\$15,000) + (50% of \$25,000=\$12,500) = \$62,500. The development fee is imposed uniformly on all multi-unit developers and is fully earned by us when received. These franchise fees are refundable only as described above under the Franchise Agreement.

When you sign the Franchise Agreement for the first Shop to be developed, which we expect will be signed at the same time the MUDA is signed, we will apply a portion of the development fee to pay the initial franchise fee for the first Shop in full. For each additional Shop you will develop under the MUDA, we will apply a pro rata portion of the development fee toward the reduced initial franchise fee, and the balance of the reduced initial franchise fee of \$15,000 for the second unit and \$12,500 for the third and any additional units is payable in a lump sum when you sign the Franchise Agreement for that unit.

Question 16

Are the Baya Bar financial statements presented on a comparative basis?

Accepted Answer

**Independent Auditor's Report**

To the Members Baya Bar Franchise System, LLC Staten Island, New York

#### **Report on the Audit of the Financial Statements**

## *Opinion*

We have audited the accompanying balance sheets of Baya Bar Franchise System, LLC as of December 31, 2023, and 2022 and the related statements of operations, members' equity and cash flows for the years ended December 31, 2023, 2022, and 2021, and the related notes to the financial statements.

In our opinion the financial statements referred to above present fairly, in all material respects, the financial position of Baya Bar Franchise System, LLC as of December 31, 2023, and 2022, and the results of their operations and their cash flows for the years ended December 31, 2023, 2022, and 2021, in accordance with accounting principles generally accepted in the United States of America.

Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 55–56)

Question 17

How does the Baya Bar initial franchise fee in Item 5 change based on the number of shops purchased, and how does this relate to the Multi-Unit Development Agreement mentioned in Item 11?

Accepted Answer

#### **ITEM 5 INITIAL FEES**

**Franchise Agreement**: You must pay us an initial franchise fee of \$35,000 for the right to establish a single Baya Bar Shop under a Franchise Agreement. This fee is used in part for working capital and in part for profit. If you are purchasing your second Shop, the initial franchise fee will be reduced to \$30,000, and if you are purchasing your third or later Shop, the initial franchise fee will be reduced to \$25,000. The initial franchise fee is imposed uniformly on all franchisees.

If (a) you fail to complete the pre-opening training program to our satisfaction, after having given you the opportunity to re-take our pre-opening training program at your expense or (b) we conclude, no more than ten days after you complete the pre-opening training program, that you do not have the ability to satisfactorily operate your Franchised Business, then we have the right to terminate your Franchise Agreement. If we terminate your Franchise Agreement, we will refund your initial franchise fee less any out-of-pocket costs we have incurred. You must sign any documents we require, including a confidentiality agreement and general release, before any money will be refunded to you. The initial franchise fee is not refundable under any other circumstances.

**Multi-Unit Development Agreement**: If you and we agree that you will develop and operate multiple Baya Bar Franchised Businesses, then you will pay to us a development fee equal to 100% of the initial franchise fee for the first Shop to be developed, plus 50% of the reduced initial franchise fee for each additional Shop you commit to develop under the MUDA. For example, if you commit to develop three Shops, the development fee is calculated as \$35,000 + (50% of \$30,000=\$15,000) + (50% of \$25,000=\$12,500) = \$62,500. The development fee is imposed uniformly on all multi-unit developers and is fully earned by us when received. These franchise fees are refundable only as described abov

Question 18

What is the relationship between the initial Baya Bar franchise fee in Item 5 and the ongoing fees described in Item 6?

Accepted Answer

## **6. FEES**

- 6.1 Initial Franchise and Royalty Fee.

As part of the consideration for the right to operate the Franchise granted herein, Franchisee shall pay to Franchisor the following fees:

- 6.1.1 Initial Franchise Fee.

Question 19

According to the Baya Bar Development Rights agreement, what must the Developer do to gain the rights to enter a Franchise Agreement?

Accepted Answer

cery stores; in captive market locations, such as airports and malls; and the Internet. - 2.3 No License to System and Marks. Developer expressly acknowledges that this Agreement is not a Franchise Agreement and does not grant to Developer any right or license to operate a Baya Bar outlet, distribute any product or service, or use the Marks. This Agreement sets forth conditions which, if fully satisfied, confer upon Developer the rights to enter a Franchise Agreement with Franchisor to establish one or more Baya Bar outlets in the Development Area only. Developer's rights to open and operate a Baya Bar outlet and use the System and Marks shall be derived only through the execution of a Franchise Agreement for each Baya Bar outlet to be established in the Development Area. - **3. TERM.** Unless sooner terminated in accordance with this Agreement, the term of this Agreement and all rights granted by Franchisor under this Agreement shall expire on the date on which Developer successfully and in a timely manner has complied with all of Developer's obligations hereunder and has completed the development obligations in accordance with the Development Schedule. #### 4. DEVELOPMENT AND FRANCHISE FEES. | 4.1 | Multi-Unit Development Fee. In consideration of the rights granted under this Agreement, | |-----|----------------------------------------------------------------------------------------------| | | Developer shall pay Franchisor a development fee (the "Development Fee") in the amount | | | of Dollars (\$), calculated as one hundred percent | | | (100%) of the initial franchise fee for the first Baya Bar outlet to be developed hereunder, | | | plus a deposit equal to fifty percent (50%) of the reduced initial franchise fee for each | | | additional outlet to be developed hereunder. For the first (1st) Baya Bar outlet to be | ![](_page_136_Picture_0.jpeg) developed, the initial franchise fee shall be Thirty-Five Thousand Dollars (\$35,000.00). For the second (2^nd) Baya Bar outlet to be developed, the initial franchise fee shall be Thirty Thousand Dollars (\$30,000.00), and for the third and each subsequent Baya Bar outlet to be developed, the initial franchise fee shall be Twenty-Five Thousand Dollars (\$25,000.00). The Development Fee is fully earned at the time this Multi-Unit Development Agreement is signed and is not refundable under any circumstances. Developer shall pay the full amount of the Development Fee to Franchisor upon Developer's execution of this Agreement. 4.2 Application of Development Fee. Contemporaneous with the execution of this Agreement, Developer shall execute the initial Franchise Agreement for the first Baya Bar outlet to be established pursuant to the Mandatory Development Schedule. Source: Item 23 — RECEIPTS (FDD pages 56–189)

Question 20

According to the Baya Bar Multi-Unit Development Agreement, what is the mandatory open date for the fourth outlet, if applicable?

Accepted Answer

nt Schedule. Provided that all conditions in Section 5.4 hereof are satisfied or waived, upon the execution of a lease for each subsequent Baya Bar outlet to be developed by Developer, Developer shall execute an additional Franchise Agreement for the development of the next Baya Bar outlet to be opened under the Mandatory Development Schedule. Notwithstanding the foregoing, Developer shall open the Baya Bar outlets in accordance with the following schedule:

| Outlet for Development | Mandatory Open Date                 |
|------------------------|-------------------------------------|
|

Source: Item 23 — RECEIPTS (FDD pages 56–189)

Question 21

Assuming the franchisee has complied with the agreement, under what conditions will Baya Bar not unreasonably withhold consent for a transfer?

Accepted Answer

Franchisee shall not directly or indirectly sell, assign, transfer, give, devise, convey or encumber this Agreement or any right or interest herein or hereunder (a "Transfer"), the Franchise, the Franchised Business or any assets thereof (except in the ordinary course of business) or suffer or permit any such assignment, transfer, or encumbrance to occur by operation of law unless it first obtains the written consent of Franchisor.

Source: Item 22 — CONTRACTS (FDD page 56)

Question 22

Besides the cost of the audit, what else must a Baya Bar franchisee pay if an audit reveals understated gross sales?

Accepted Answer

| (1)                                                              | (2)                                                                                                             | (3)             | (4)                                                                                                                                                                                                                                                                                                                                                                                     |
|------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Fees (1)                                                         | Amount                                                                                                          | Due Date        | Remarks                                                                                                                                                                                                                                                                                                                                                                                 |
| Pre-Opening Training (For New or Replacement Employees) | Our then-current per session training fee, plus expenses Current per session training fee = \$3,000 | Before Training | We will train up to three people at no additional charge. If you request that we provide our pre-opening training program to any additional employees, or to new or replacement employees during the term of your Franchise Agreement, you must pay our training fee as well as the trainees' expenses, including travel, lodging, meals and wages. |
| Additional Onsite Training/Remedial Training               | Our then-current per diem rate per trainer, plus expenses Current per diem rate = \$600             | When billed     | If you request that we provide additional training or support at your Shop, or if as the result of an inspection or quality assurance audit we believe that remedial training is necessary, you must pay our daily fee for each trainer we send to your Shop, and you must reimburse each trainer's expenses, including travel, lodging and meals.     |
| Interest                                                         | 18% per annum or the highest interest rate allowed by applicable law, whichever is less                | On demand       | Interest may be charged on all overdue amounts. Interest accrues from the original due date until payment is received in full. * See below                                                                                                                                                                                                                               |
| Audit Fee                                                        | Cost of audit (estimated to be between \$1,000 and \$5,000)                                            | When billed     | Payable only if we find, after an audit, that you have understated Gross Sales by 2% or more or you have understated any amount you owe to us. You must also pay the understated amount plus interest.                                                                                                                                                             |

![](_page_12_Picture_0.jpeg)

| (1)                                              | (2)                                                                     | (3)                                            | (4)

Source: Item 6 — OTHER FEES (FDD pages 11–16)

Question 23

Besides those specifically listed, what other insurance might a Baya Bar franchisee be required to obtain?

Accepted Answer

h the Americans with Disabilities Act.

#### **Insurance**

When you sign the lease for the Shop premises or 90 days after you sign the Franchise Agreement, whichever occurs first, you must obtain the insurance coverage for the Shop that is required by the terms of your lease and applicable law, and that we specify in the Manual or otherwise in writing. Your insurance coverage must be maintained during the term of the Franchise Agreement and must be obtained from a responsible, duly licensed carrier or carriers acceptable to us and having a rating of at least "A-VII" with A.M. Best Company. All insurance must be on an "occurrence" basis. Currently you must maintain the following insurance: (1) "Special" causes of loss coverage forms, including fire and extended coverage, crime, vandalism, and malicious mischief, on all property of the Franchised Business, for full repair and replacement value (subject to a reasonable deductible); (2) Business interruption insurance covering at least 12 months of income; (3) Commercial General Liability insurance, including products liability coverage, and broad form commercial liability coverage, written on an "occurrence" policy form in an amount of not less than \$1,000,000 single limit per occurrence and \$2,000,000 aggregate limit; (4) Business Automobile Liability insurance including owned, leased, non-owned and hired automobiles coverage in an amount of not less than \$1,000,000; (5) Workers Compensation coverage as required by state law; and (6) any insurance required by the terms of your lease, required by law or that we may require in the future.

All insurance policies, except for workers' compensation, must name us, our affiliates and the officers, directors, shareholders, partners, agents, representatives, independent contractors, servants and employees of each of them, as additional named insureds. All insurance policies must include a waiver of subrogation in favor of us and our affiliates, must be primary and non-contributing with any insurance carried by us or our affiliates, and must stipulate th

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 20–24)

Question 24

What is the condition for Baya Bar to provide advice and written materials concerning techniques of managing and operating the shop?

Accepted Answer

- 2. Advice and written materials (including updates to the Manual) concerning techniques of managing and operating the Shop, including new developments and improvements in equipment, food products, packaging and preparation. (Franchise Agreement, Section 5.7.)

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 26–36)

Question 25

What is the condition regarding default that would prevent the Baya Bar franchisor from opening or franchising other Baya Bar locations near the franchisee's territory?

Accepted Answer

Subject to Section 3.2 below, Franchisor agrees that during the Term of this Agreement, Franchisor will not operate, and will not authorize any other franchisees to operate, a Baya Bar outlet in the Territory using the same Marks as licensed to Franchisee in this Agreement so long as Franchisee is not in default under this Agreement or this Agreement has not been terminated.

Except as otherwise specified in this Agreement, Franchisor reserves the right to open, operate or franchise Baya Bar franchises bordering and adjacent to the Territory.

Except as set forth in this Agreement, Franchisee is prohibited from serving and soliciting customers outside of the Territory and from alternative methods of distribution as more fully specified herein.

Source: Item 22 — CONTRACTS (FDD page 56)

Question 26

What condition must be satisfied or waived before executing an additional Franchise Agreement for the second Baya Bar outlet?

Accepted Answer

r and Developer. Developer hereby acknowledges and agrees that the training Developer receives pursuant ![](_page_137_Picture_0.jpeg) - to the initial Franchise Agreement executed concurrently with this Agreement is sufficient to allow Developer to construct, equip, open and operate each of Developer's Baya Bar outlets in the Development Area. - 5.2 Mandatory Development Schedule. Subsequent to Developer's signing of this Agreement and the initial Franchise Agreement, and provided that all conditions in Section 5.4 hereof are satisfied or waived, upon the execution of a lease for Developer's first Baya Bar outlet, Developer shall execute an additional Franchise Agreement for the development of the second Baya Bar outlet to be opened under the Mandatory Development Schedule. Provided that all conditions in Section 5.4 hereof are satisfied or waived, upon the execution of a lease for each subsequent Baya Bar outlet to be developed by Developer, Developer shall execute an additional Franchise Agreement for the development of the next Baya Bar outlet to be opened under the Mandatory Development Schedule. Notwithstanding the foregoing, Developer shall open the Baya Bar outlets in accordance with the following schedule: | Outlet for Development | Mandatory Open Date | |------------------------|-------------------------------------| | 1 | months following the Effective Date | | 2 | months following the Effective Date | | 3 | months following the Effective Date | | 4 (if applicable) | months following the Effective Date | Developer acknowledges and agrees that the terms of the Mandatory Development Schedule are reasonable and viable based upon Developer's independent investigation and analysis. Failure by Developer to adhere to the Mandatory Development Schedule (including any extensions thereof approved by Franchisor in writing pursuant to Section 5.3 below) shall constitute a material event of default under this Agreement. - 5.3 Extension of Mandatory Development Schedule. If Developer is unable to meet the Mandatory Development Schedule for any outlet, Developer may seek a reasonable extension from Franchisor. Any request for an extension must be in writing and submitted to Franchisor at least sixty (60) days prior to the Mandatory Open Date for such outlet. Franchisor shall not unreasonably withhold consent for such reasonable extension provided that Developer has (i) submitted its extension request in a timely manner; (ii) demonstrated diligent efforts to meet the original Mandatory Open Date; and (iii) has at all times acted in good faith and is otherwise fulfilling its obligations under this Agreement. - 5.4 Conditions to Exercise Developer's Rights. Source: Item 23 — RECEIPTS (FDD pages 56–189)

Question 27

What conditions must a Baya Bar developer fulfill to be granted rights to establish additional Baya Bar café outlets in the Development Area?

Accepted Answer

e Developer hereby accepts from the Franchisor, on the terms and conditions set forth in this Agreement, which includes, but is not limited to, the execution of a Franchise Agreement pursuant to Section 4.1 hereof, the right to develop, construct, open and operate one (1) Baya Bar outlet within the Development Area set forth in Attachment 2. Developer shall be granted rights to establish additional Baya Bar café outlets in the Development Area, up to the total number of outlets set forth in the Mandatory Development Schedule set forth in Section 5.2 hereof, subject to Developer's full compliance with all conditions precedent to the grant of such rights outlined below, which rights shall be exercised in accordance with Section 4.1 hereof. - 2.2 Reservation of Rights. Notwithstanding the provisions of Section 2.1 above, Developer understands and agrees Franchisor fully reserves all other rights, other than as specified in this Agreement, for sales, solicitation and distribution of Baya Bar products and services within or outside of the Development Area. This reservation of Franchisor's rights includes, but is not limited to, Franchisor's right to the rights to offer (i) other products or services not offered under the Marks, (ii) other food or beverage concepts under the Marks or other trademarks, and (iii) products or services through any channel in the Development Area other than a dedicated Baya Bar café such as distribution through retail outlets, including but not limited to, grocery stores; in captive market locations, such as airports and malls; and the Internet. - 2.3 No License to System and Marks. Developer expressly acknowledges that this Agreement is not a Franchise Agreement and does not grant to Developer any right or license to operate a Baya Bar outlet, distribute any product or service, or use the Marks. This Agreement sets forth conditions which, if fully satisfied, confer upon Developer the rights to enter a Franchise Agreement with Franchisor to establish one or more Baya Bar outlets in the Development Area only. Developer's rights to open and operate a Baya Bar outlet and use the System and Marks shall be derived only through the execution of a Franchise Agreement for each Baya Bar outlet to be established in the Development Area. - **3. TERM.** Unless sooner terminated in accordance with this Agreement, the term of this Agreement and all rights granted by Franchisor under this Agreement shall expire on the date on which Developer successfully and in a timely manner has complied with all of Developer's obligations hereunder and has completed the development obligations in accordance with the Development Schedule. #### 4. DEVELOPMENT AND FRANCHISE FEES. | 4.1 | Multi-Unit Development Fee. In consideration of the rights granted under this Agreement, | |-----|----------------------------------------------------------------------------------------------| | | Developer shall pay Franchisor a development fee (the "Development Fee") in the amount | | | of Dollars (\$), calculated as one hundred percent | | | (100%) of the initial franchise fee for the first Baya Bar outlet to be developed hereunder, | | | plus a deposit equal to fifty percent (50%) of the reduced initial franchise fee for each | | | additional outlet to be developed hereunder. For the first (1st) Baya Bar outlet to be | ![](_page_136_Picture_0.jpeg) developed, the initial franchise fee shall be Thirty-Five Thousand Dollars (\$35,000.00). For the second (2^nd) Baya Bar outlet to be developed, the initial franchise fee shall be Thirty Thousand Dollars (\$30,000.00), and for the third and each subsequent Baya Bar outlet to be developed, the initial franchise fee shall be Twenty-Five Thousand Dollars (\$25,000.00). The Development Fee is fully earned at the time this Multi-Unit Development Agreement is signed and is not refundable under any circumstances. Developer shall pay the full amount of the Development Fee to Franchisor upon Developer's execution of this Agreement. 4.2 Application of Development Fee. Contemporaneous with the execution of this Agreement, Developer shall execute the initial Franchise Agreement for the first Baya Bar outlet to be established pursuant to the Mandatory Development Schedule. Developer shall receive a Thirty-Five Thousand Dollar (\$35,000.00) credit from the Development Fee, which shall be applicable to the Initial Franchise Fee due under the initial Franchise Agreement as payment in full. Upon the execution of the second Franchise Agreement for a Baya Bar outlet to be developed hereunder, Developer shall receive a Fifteen Thousand Dollars (\$15,000.00) credit from the Development Fee, which shall be applied as Fifty Percent (50%) payment of the Initial Franchise Fee payable pursuant to the second Franchise Agreement and Developer shall pay the balance of the Initial Franchise Fee owed. Source: Item 23 — RECEIPTS (FDD pages 56–189)

Question 28

What is the consequence if a Baya Bar franchisee fails to deliver required notices for a successor agreement?

Accepted Answer

If applicable law requires Franchisor to give notice to Franchisee prior to the expiration of the Term, this Agreement shall remain in effect on a month-to-month basis until Franchisor has given the notice required by such applicable law.

If Franchisor is not offering new Baya Bar franchises, is in the process of revising, amending or signing the Franchisor's Successor Agreement form of franchise agreement or disclosure document, or Franchisor is not lawfully able to offer Franchisee the then current form of Successor Franchise Agreement at the time Franchisee advises Franchisor pursuant to Paragraph 5.2 hereof that Franchisee desires to sign a Successor Agreement, Franchisor may, in Franchisor's sole discretion, (i) offer to sign this Successor Agreement upon the same terms set forth herein for the appropriate successor term or (ii) offer to extend the Term hereof on a month-to-month basis following the expiration of the Term for as long as Franchisor deems necessary or appropriate so that Franchisor may lawfully offer the then current form of Successor Franchise Agreement.

Any timeframes specified in this Paragraph 5 shall be inclusive of any state mandated notice periods.

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5.4 Additional Reservation of Rights. Notwithstanding anything herein to the contrary, Franchisor reserves the right not to enter into a successor franchise agreement for this Franchise as a result of a decision to withdraw from a marketing area or the Territory in which Franchisee's Franchised Business is located.

Source: Item 22 — CONTRACTS (FDD page 56)

Question 29

What constitutes 'cause' for termination of the Baya Bar agreement?

Accepted Answer

- 7.2.1 has misrepresented or omitted material facts in applying for the development rights granted hereunder;

- 7.2.2 falsifies any report required to be furnished Franchisor hereunder;

- 7.2.3 fails to comply with any federal, state or local law, rule or regulation, applicable to the development and operations of Developer's Baya Bar outlets, including, but not limited to, the failure to pay taxes;

- 7.2.4 fails to develop the Baya Bar outlets in accordance with the Mandatory Development Schedule.

- 7.2.5 attempts a Transfer in violation of the provisions of Article 6 of this Agreement;

- 7.2.6 is convicted of, or pleads no contest to, a felony or to a crime that could damage the goodwill associated with the Marks or does anything that may harm the reputation of the System or the goodwill associated with the Marks;

- 7.2.7 receives an adverse judgment or a consent decree in any case or proceeding involving allegations of fraud, racketeering, unfair or improper trade practices or similar claim which is likely to have an adverse effect on the System, or the Marks, the goodwill associated therewith or Franchisor's interest therein, in Franchisor's sole opinion;

- 7.2.8 fails to comply with the non-disclosure and non-competition covenants in Article 8 hereof:

- 7.2.9 defaults, or an affiliate of Developer defaults, under any other agreement, including any Franchise Agreement, with Franchisor, or any of Franchisor's affiliates or suppliers, or a landlord and does not cure such default within the time period provided in such other agreement; or

- 7.2.10 terminates this Agreement without cause.

Source: Item 23 — RECEIPTS (FDD pages 56–189)

Question 30

What constitutes a 'Transfer' that would violate Article 6 of the Baya Bar agreement?

Accepted Answer

- 7.2.5 attempts a Transfer in violation of the provisions of Article 6 of this Agreement;

Source: Item 23 — RECEIPTS (FDD pages 56–189)

Question 31

On what date does the Baya Bar Development Rights agreement expire, assuming it is not terminated earlier?

Accepted Answer

Unless sooner terminated in accordance with this Agreement, the term of this Agreement and all rights granted by Franchisor under this Agreement shall expire on the date on which Developer successfully and in a timely manner has complied with all of Developer's obligations hereunder and has completed the development obligations in accordance with the Development Schedule.

Source: Item 23 — RECEIPTS (FDD pages 56–189)

Question 32

What is the deadline for Baya Bar to provide standard specifications and layouts for building and furnishing the shop under the MUDA?

Accepted Answer

Under the MUDA:

- 1. We will review the information regarding potential sites that you provide to us to determine whether the sites meet our standards and criteria for a Baya Bar Shop and, if the site meets our criteria, accept the site for a Shop. (MUDA, Section 8.1.)
- 2. We will provide you with standard specifications and layouts for building and furnishing the Shop. (MUDA, Section 8.2.)
- 3. We will review your site plan and final build-out plans and specifications for conformity to our standards and specifications. (MUDA, Section 8.3.)
- 4. We will provide other resources and assistance as may be developed and offered to our multi-unit developers. (MUDA, Section 8.4.)

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 26–36)

Question 33

What is the deadline for Baya Bar to review the site plan and final build-out plans and specifications for conformity to their standards and specifications?

Accepted Answer

standards based on the individual factors and components of a particular site.

You must have located and submitted to us, for our review, all information we require regarding the site you propose for your Shop no later than 90 days after you have signed the Franchise Agreement. We will have 30 days after we receive all required information and materials from you to accept or decline the proposed site as the location for your Baya Bar Shop. If we do not provide our specific acceptance of a proposed site, the site is deemed not accepted. We do not warrant or guarantee that your Shop will be successful at any site that we accept. Our acceptance only means that the site meets our minimum requirements for a Shop, subject to any deviation from our standards as we may permit.

We will provide you with our current written site selection guidelines and any other site selection counseling and assistance we think is advisable.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 26–36)

Question 34

What is the dependency for Baya Bar to conduct an onsite evaluation of a potential site?

Accepted Answer

Before you lease or purchase the site for the Shop, you must locate a site that satisfies our site selection guidelines. If we deem it necessary we will conduct one onsite evaluation, but before we conduct the evaluation you must submit to us in the form we specify a description of the site, including evidence that the site satisfies our site selection guidelines, together with other information and materials that we may reasonably require, including a letter of intent or other evidence that confirms your favorable prospects for obtaining the site. We have the right to approve deviations from our site selection standards based on the individual factors and components of a particular site.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 26–36)

Question 35

What is the dependency for Baya Bar to designate maximum prices?

Accepted Answer

- 7. Designate the maximum prices you may charge, as permitted by applicable law. (Franchise Agreement, Section 7.13.) Our designation of the maximum pricing is not a guarantee that you will achieve a specific level of sales or profitability.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 26–36)

Question 36

What must the Baya Bar Developer complete in order for the Development Rights agreement to expire on time?

Accepted Answer

Unless sooner terminated in accordance with this Agreement, the term of this Agreement and all rights granted by Franchisor under this Agreement shall expire on the date on which Developer successfully and in a timely manner has complied with all of Developer's obligations hereunder and has completed the development obligations in accordance with the Development Schedule.

Source: Item 23 — RECEIPTS (FDD pages 56–189)

Question 37

Is the Developer's right to establish additional Baya Bar café outlets in the Development Area subject to any conditions?

Accepted Answer

Developer shall be granted rights to establish additional Baya Bar café outlets in the Development Area, up to the total number of outlets set forth in the Mandatory Development Schedule set forth in Section 5.2 hereof, subject to Developer's full compliance with all conditions precedent to the grant of such rights outlined below, which rights shall be exercised in accordance with Section 4.1 hereof. - 5.4 Conditions to Exercise Developer's Rights. All of the following conditions must be satisfied or waived, in Franchisor's sole discretion, before Franchisor grants Developer the right to develop an additional Baya Bar outlet in accordance with Section 4.1 hereof and pursuant to a Franchise Agreement: - 5.4.1 Developer shall (i) request Franchisor's then-current Franchise Disclosure Document, (ii) submit to Franchisor all information and other documents requested by Franchisor prior to and as a basis for the issuance of Franchise Agreements in the System, (iii) submit to Franchisor all financial statements reasonably requested by Franchisor, and (iv) satisfy Franchisor's then-current financial criteria for multi-unit franchisees. - 5.2 Mandatory Development Schedule. Subsequent to Developer's signing of this Agreement and the initial Franchise Agreement, and provided that all conditions in Section 5.4 hereof are satisfied or waived, upon the execution of a lease for Developer's first Baya Bar outlet, Developer shall execute an additional Franchise Agreement for the development of the second Baya Bar outlet to be opened under the Mandatory Development Schedule. Provided that all conditions in Section 5.4 hereof are satisfied or waived, upon the execution of a lease for each subsequent Baya Bar outlet to be developed by Developer, Developer shall execute an additional Franchise Agreement for the development of the next Baya Bar outlet to be opened under the Mandatory Development Schedule. Notwithstanding the foregoing, Developer shall open the Baya Bar outlets in accordance with the following schedule: Developer acknowledges and agrees that the terms of the Mandatory Development Schedule are reasonable and viable based upon Developer's independent investigation and analysis. Failure by Developer to adhere to the Mandatory Development Schedule (including any extensions thereof approved by Franchisor in writing pursuant to Section 5.3 below) shall constitute a material event of default under this Agreement. - 5.3 Extension of Mandatory Development Schedule. If Developer is unable to meet the Mandatory Development Schedule for any outlet, Developer may seek a reasonable extension from Franchisor. Any request for an extension must be in writing and submitted to Franchisor at least sixty (60) days prior to the Mandatory Open Date for such outlet. Franchisor shall not unreasonably withhold consent for such reasonable extension provided that Developer has (i) submitted its extension request in a timely manner; (ii) demonstrated diligent efforts to meet the original Mandatory Open Date; and (iii) has at all times acted in good faith and is otherwise fulfilling its obligations under this Agreement. Source: Item 23 — RECEIPTS (FDD pages 56–189)

Question 38

Is the Baya Bar development fee refundable?

Accepted Answer

The Development Fee is fully earned at the time this Multi-Unit Development Agreement is signed and is not refundable under any circumstances. Developer shall pay the full amount of the Development Fee to Franchisor upon Developer's execution of this Agreement.

If (a) you fail to complete the pre-opening training program to our satisfaction, after having given you the opportunity to re-take our pre-opening training program at your expense or (b) we conclude, no more than ten days after you complete the pre-opening training program, that you do not have the ability to satisfactorily operate your Franchised Business, then we have the right to terminate your Franchise Agreement. If we terminate your Franchise Agreement, we will refund your initial franchise fee less any out-of-pocket costs we have incurred. You must sign any documents we require, including a confidentiality agreement and general release, before any money will be refunded to you. The initial franchise fee is not refundable under any other circumstances.

Source: Item 5 — INITIAL FEES (FDD pages 10–11)

Question 39

What is the first condition that must be met for Franchisor to not unreasonably withhold consent for an extension of the Mandatory Development Schedule for a Baya Bar outlet?

Accepted Answer

- 5.3 Extension of Mandatory Development Schedule. If Developer is unable to meet the Mandatory Development Schedule for any outlet, Developer may seek a reasonable extension from Franchisor. Any request for an extension must be in writing and submitted to Franchisor at least sixty (60) days prior to the Mandatory Open Date for such outlet. Franchisor shall not unreasonably withhold consent for such reasonable extension provided that Developer has (i) submitted its extension request in a timely manner; (ii) demonstrated diligent efforts to meet the original Mandatory Open Date; and (iii) has at all times acted in good faith and is otherwise fulfilling its obligations under this Agreement.

Source: Item 23 — RECEIPTS (FDD pages 56–189)

Question 40

Does the Baya Bar franchise agreement specify any conditions under which the franchisor's approval for relocation or reconstruction after a casualty can be considered unreasonably withheld?

Accepted Answer

- 17.2.3 ceases to operate the Franchised Business for a period of five (5) days or more; provided, however, that this provision shall not apply if through no fault of Franchisee, the premises are damaged or destroyed by a casualty and Franchisee applies within thirty (30) days after such event, for Franchisor's approval to relocate or reconstruct the premises (which approval shall not be unreasonably withheld) and Franchisee diligently pursues such reconstruction or relocation.

Source: Item 22 — CONTRACTS (FDD page 56)

Question 41

Does the Baya Bar franchise agreement specify any conditions under which the franchisor's approval for relocation after loss of possession can be considered unreasonably withheld?

Accepted Answer

against Franchisee's business or property; or if suit to foreclose any lien or mortgage against the Franchised Business premises or equipment is instituted against Franchisee and not dismissed within thirty (30) days.

- 17.2 Defaults With No Opportunity to Cure. Franchisee shall be deemed to be in material default and Franchisor may, at its option, terminate this Agreement and all rights granted hereunder, without affording Franchisee any opportunity to cure the default, effective immediately upon notice to Franchisee, if Franchisee, or any Principal, as the case may be:
  - 17.2.1 fails to acquire a site for the Franchised Business, complete construction of the Franchised Business, obtain all licenses and permits before opening, or open the Franchised Business within the time and in the manner specified in Article 8.
  - 17.2.2 falsifies any report required to be furnished Franchisor hereunder;
  - 17.2.3 ceases to operate the Franchised Business for a period of five (5) days or more; provided, however, that this provision shall not apply if through no fault of Franchisee, the premises are damaged or destroyed by a casualty and Franchisee applies within thirty (30) days after such event, for Franchisor's approval to relocate or reconstruct the premises (which approval shall not be unreasonably withheld) and Franchisee diligently pursues such reconstruction or relocation.

Source: Item 22 — CONTRACTS (FDD page 56)

Question 42

Does the Baya Bar franchisee have any recourse if the franchisor terminates the Multi-Unit Development Agreement without cause, other than death or disability?

Accepted Answer

s of the multi-unit development agreement. You should read these provisions in the agreement attached to this disclosure document.**

|  | Provision | Unit Development | Summary |
|----|---------------------------------------------------|-------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  |  | Agreement |  |
| a. | Length of the franchise term | Art. 3 | As determined by you and us based on the number of Baya Bar outlets you are to develop. |
| b. | Renewal or extension of the Term | Not Applicable | Not Applicable |
| c. | Requirements for franchisee to renew or extend | Not Applicable | Not Applicable |
| d. | Termination by franchisee | Not Applicable | You may seek termination upon any grounds available by state law. |
| e. | Termination by franchisor without cause | Section 6.6 | The Multi-Unit Development Agreement will terminate automatically upon your death or permanent disability, unless prohibited by law and the Development Rights are transferred within 6 months to a replacement developer that we approve. |
| f. | Termination by franchisor with cause | Section 7.1 | We may terminate only if you default. The Multi-Unit Development Agreement describes defaults throughout. Please read it carefully. |
| g. | "Cause" defined – curable defaults | Section 7.3 | You have 5 days to cure non-payments and any other defaults (except for non curable defaults listed in the Multi-Unit Development Agreement and described in h. immediately below). |
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|  |  | Unit Development |  |
|  | Provision | Agreement | Summary |
| h. | "Cause" defined - non-curable defaults | Sections 7.1 and 7.2 | The Multi-Unit Development Agreement will terminate automatically, without notice for the following defaults: insolvency; bankruptcy; written admission of inability to pay debts; receivership; levy; composition with creditors; unsatisfied final judgment for more than 30 days; or foreclosure proceeding that is not dismissed within 30 days. We may terminate the Multi-Unit Development Agreement upon notice to you if you: misrepresent or omit a material fact in applying for the Development Rights; falsify any report to us; fail to comply with any federal, state or local law, rule or regulation, applicable to the development and operations of your Baya Bar outlets, including, but not limited to, the failure to pay taxes; fail to develop the Baya Bar outlets in accordance with the Mandatory Development Schedule; attempt a transfer in violation of the Franchise Agreement; are convicted or plead no contest to a felony or crime that could damage the goodwill or reputation of our trademarks or the System; receive an adverse judgment in any proceeding involving allegations of fraud, racketeering or improper trade practices or similar claim that could damage the goodwill or reputation of our trademarks or the System; fail to comply with non competition covenants; default, or your affiliate defaults, under any other agreement, including any Franchise Agreement, with us or any of our affiliates, suppliers or landlord and does not cure such default within the time period provided in such other agreement; or terminate the Multi-Unit Development Agreement without cause. |
| i. | Franchisee's obligations on termination/ non-renewal | Section 7.4 | Upon termination, you must: cease all development operations and comply with the non-disclosure and non-competition covenants. |
| j. | Assignment of contract by franchisor | Section 6.1 | No restrictions on our right to assign. |
| k. | "Transfer" by franchisee defined | Section 6.3 | Any assignment, sale, transfer, gift, devise or encumbrance of any interest in the Multi-Unit Development Agreement or Development Rights. |
| l. | Franchisor approval of transfer by franchisee | Sections 6.2, 6.3 | No transfer is allowed without our consent, which we will not unreasonably withhold. |
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|  |  | Unit Development |  |
|  | Provision | Agreement | Summary |
| m. | Conditions for franchisor approval of a transfer | Section 6.3 and 6.4 | Conditions include: our decision not to exercise our right of first refusal; transferee meets our then-current standards for qualifying developers; you have paid us all amounts owed;

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 43–52)

Question 43

Can a Baya Bar franchisee transfer their franchise without the franchisor's consent?

Accepted Answer

| h. | "Cause" defined - non-curable | Sections 17.1 and | The Franchise Agreement will terminate                                                  |
|----|-------------------------------|-------------------|-----------------------------------------------------------------------------------------|
|    | defaults                      | 17.2              | automatically, without notice for the                                                   |
|    |                               |                   | following defaults: insolvency; bankruptcy;                                             |
|    |                               |                   | written admission of inability to pay debts;                                            |
|    |                               |                   | receivership; levy; composition with                                                    |
|    |                               |                   | creditors; unsatisfied final judgment for                                               |
|    |                               |                   | more than 30 days; or foreclosure                                                       |
|  |  |  | proceeding that is not dismissed within 30 |
|  |  |  | days. |
|    |                               |                   | We may terminate the Franchise                                                          |
|    |                               |                   | Agreement upon notice to you if you: do                                                 |
|    |                               |                   | not acquire a site, do not complete                                                     |
|    |                               |                   | construction, obtain permits and/or open                                                |
|    |                               |                   | the Franchised Business within required                                                 |
|    |                               |                   | time frames; falsify any report to us; cease                                            |
|    |                               |                   | operations for 5 days or more, unless the                                               |
|    |                               |                   | premises are damaged and you apply to                                                   |
|    |                               |                   | relocate; lose possession of the premises,                                              |
|    |                               |                   | unless you are not at fault for loss and you                                            |
|  |  |  | timely apply to relocate; fail to restore and |
|  |  |  | re-open the Franchised Business within |
|    |                               |                   | 120 days after a casualty, as may be                                                    |
|    |                               |                   | extended by us; fail to comply with                                                     |
|    |                               |                   | applicable laws; default under any lease                                                |
|    |                               |                   | for the premises; understate Gross                                                      |
|    |                               |                   | Revenue two (2) or more times; fail to                                                  |
|    |                               |                   | comply with insurance and indemnification                                               |
|    |                               |                   | requirements; attempt a transfer in                                                     |
|    |                               |                   | violation of the Franchise Agreement; fail,                                             |
|  |  |  | or your legal representative fails to |
|  |  |  | transfer as required upon your death or |
|    |                               |                   | permanent disability; misrepresent or omit                                              |
|    |                               |                   | a material fact in applying for the                                                     |
|    |                               |                   | Franchise; are convicted or plead no                                                    |
|    |                               |                   | contest to a felony or crime that could                                                 |
|    |                               |                   | damage the goodwill or reputation of our                                                |
|    |                               |                   | trademarks or the System; receive an                                                    |
|    |                               |                   | adverse judgment in any proceeding                                                      |
|    |                               |                   | involving allegations of fraud, racketeering                                            |
|  |  |  | or improper trade practices or similar claim |
|  |  |  | that could damage the goodwill or |
|    |                               |                   | reputation of our trademarks or the                                                     |
|    |                               |                   | System; conceal revenues or maintain                                                    |
|    |                               |                   | false books; create a threat or danger to                                               |
|    |                               |                   | public health or safety; refuse an                                                      |
|    |                               |                   | inspection or audit by us; use our                                                      |
|    |                               |                   | trademarks, copyrighted material or                                                     |
|    |                               |                   | Confidential Information in an                                                          |
|    |                               |                   | unauthorized manner; make an                                                            |
|  |  |  | unauthorized disclosure of Confidential |
|  |  |  | Information; fail to comply with non |
|    |                               |                   | competition covenants; default in the                                                   |
|    |                               |                   | performance of your obligations three (3)                                               |
|    |                               |                   | or more times during the term or receive                                                |
|    |                               |                   | two (2) or more default notices in any 12-                                              |
|    |                               |                   | month period; default under any other                                                   |
|    |                               |                   | agreement with us or our affiliate; have                                                |
|    |                               |                   | insufficient funds to honor a check or EFT                                              |
|    |                               |                   | two (2) or more times within any twelve                                                 |
|    |                               |                   | (12)-month period; or terminate the                                                     |
|    |                               |                   | Franchise Agreement without cause.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 43–52)

Question 44

Does the Baya Bar franchisee have to transfer all interest in Electronic Advertising to the franchisor upon request?

Accepted Answer

- 2.3 Transfer.

On Termination of the Franchise Agreement, or on periodic request of Franchisor, Franchisee will immediately:

- 2.3.1 direct all internet service providers, domain name registries, internet search engines, social media companies, and other listing agencies (collectively, the "Internet Companies") with which Franchisee has Electronic Advertising: (i) to transfer all of Franchisee's interest in such Electronic Advertising to Franchisor; and (ii) to execute such documents and take such actions as may be necessary to effectuate such transfer.

In the event Franchisor does not desire to accept any or all such Electronic Advertising, Franchisee will immediately direct the Internet Companies to terminate such Electronic Advertising or will take such other actions with respect to the Electronic Advertising as Franchisor directs; and

- 2.3.2 direct all telephone companies, telephone directory publishers, and telephone directory listing agencies (collectively, the "Telephone Companies") with which Franchisee has Telephone Listings: (i) to transfer all Franchisee's interest in such Telephone Listings to Franchisor; and (ii) to execute such documents and take such actions as may be necessary to effectuate such transfer.

In the event Franchisor does not desire to accept any or all such Telephone Listings, Franchisee will immediately direct the Telephone Companies to terminate such Telephone Listings or will take such other actions with respect to the Telephone Listings as Franchisor directs.

- 2.4 Appointment; Power of Attorney.

Franchisee hereby constitutes and appoints Franchisor and any officer or agent of Franchisor, for Franchisor's benefit under the Franchise Agreement and this Agreement or otherwise, with full power of substitution, as Franchisee's true and lawful attorney-in-fact with full power and authority in Franchisee's place and stead, and in Franchisee's name or the name of any affiliated person or affiliated company of Franchisee, to take any and all appropriate action and to execute and deliver any and all documents that may be necessary or desirable to accomplish the purposes of this Agreement.

Source: Item 22 — CONTRACTS (FDD page 56)

Question 45

Does the Baya Bar franchisee have to transfer all interest in Telephone Listings to the franchisor upon request?

Accepted Answer

itle, and interest in and to those certain

![](_page_124_Picture_0.jpeg)

telephone numbers and regular, classified, internet page, and other telephone directory listings (collectively, the "Telephone Listings") related to the Franchised Business or the Marks.

- 2.3 Transfer. On Termination of the Franchise Agreement, or on periodic request of Franchisor, Franchisee will immediately:
- 2.3.1 direct all internet service providers, domain name registries, internet search engines, social media companies, and other listing agencies (collectively, the "Internet Companies") with which Franchisee has Electronic Advertising: (i) to transfer all of Franchisee's interest in such Electronic Advertising to Franchisor; and (ii) to execute such documents and take such actions as may be necessary to effectuate such transfer. In the event Franchisor does not desire to accept any or all such Electronic Advertising, Franchisee will immediately direct the Internet Companies to terminate such Electronic Advertising or will take such other actions with respect to the Electronic Advertising as Franchisor directs; and
- 2.3.2 direct all telephone companies, telephone directory publishers, and telephone directory listing agencies (collectively, the "Telephone Companies") with which Franchisee has Telephone Listings: (i) to transfer all Franchisee's interest in such Telephone Listings to Franchisor; and (ii) to execute such documents and take such actions as may be necessary to effectuate such transfer. In the event Franchisor does not desire to accept any or all such Telephone Listings, Franchisee will immediately direct the Telephone Companies to terminate such Telephone Listings or will take such other actions with respect to the Telephone Listings as Franchisor directs.
- 2.4 Appointment; Power of Attorney. Franchisee hereby constitutes and appoints Franchisor and any officer or agent of Franchisor, for Franchisor's benefit under the Franchise Agreement and this Agreement or otherwise, with full power of substitution, as Franchisee's true and lawful attorney-in-fact with full power and authority in Franchisee's place and stead, and in Franchisee's name or the name of any affiliated person or affiliated company of Franchisee, to take any and all appropriate action and to execute and deliver any and all documents that may be necessary or desirable to accomplish the purposes of this Agreement. Franchisee further agrees that this appointment constitutes a power coupled with an interest and is irrevocable until Franchisee has satisfied all of its obligations under the Franchise Agreement and any and all other agreements to which Franchisee and any of its affiliates on the one hand, and Franchisor and any of its affiliates on the other, are parties, including without limitation this Agreement. Without limiting the generality of the foregoing, Franchisee hereby grants to Franchisor the power and right to do the following:
- 2.4.1 Direct the Internet Companies to transfer all Franchisee's interest in and to the Electronic Advertising to Franchisor, or alternatively, to direct the Internet Companies to terminate any or all of the Electronic Advertising;
- 2.4.2 Direct the Telephone Companies to transfer all Franchisee's interest in and to the Telephone Listings to Franchisor, or alternatively, to direct the Telephone Companies to terminate any or all of the Telephone Listings;

Source: Item 22 — CONTRACTS (FDD page 56)

Question 46

What is a Baya Bar franchisee's right to enter into a Successor Franchise Agreement conditioned upon?

Accepted Answer

- 5.2 Conditions of Successor Agreement. Franchisee's right to enter into a Successor Franchise Agreement is conditioned upon the following:
  - 5.2.1 Franchisee shall be in full compliance with this Agreement and shall have materially performed Franchisee's obligations under this Agreement, the Manual and under all other agreements that may be in effect between Franchisee and Franchisor, including but not limited to all monetary obligations.

![](_page_64_Picture_0.jpeg)

- 5.2.2 Franchisee shall not have committed three (3) or more events constituting default during the then current Term of this Agreement, whether or not such defaults were cured.

- 5.2.3 Franchisee will have completed any required additional training to Franchisor's reasonable satisfaction.

- 5.2.4 Franchisee shall have obtained the right to continue to occupy the premises of the Franchised Business following the expiration of the Term hereof for the full term of the Successor Franchise Agreement and/or have received Franchisor's approval regarding locating the Franchised Business at a new location.

- 5.2.5 Franchisee shall execute a general release of all claims Franchisee may have against Baya Bar Franchise Systems, LLC, its parent, subsidiaries and affiliates, its officers, directors, shareholders, agents, and employees, whether in their corporate and/or individual capacities, in the form attached hereto as Attachment 4.

This release will include all claims arising under any federal, state, or local law, rule, or ordinance.

- 5.2.6 Franchisee performs such remodeling, repairs, replacements and redecoration as Franchisor may require in order to cause the Franchised Business premises, equipment, fixtures, furnishings and furniture to conform to the plans and specifications being used for new or remodeled franchised businesses on the renewal date.

- 5.2.7 Franchisee shall pay the required Successor Agreement Fee and sign the Successor Franchise Agreement.

Source: Item 22 — CONTRACTS (FDD page 56)

Question 47

Can the Baya Bar franchisor approve a developer to participate in a business that would otherwise be a violation of the non-compete agreement?

Accepted Answer

In consideration for such specialized training, trade secrets, Confidential Information and rights, Developer covenants that, except as otherwise approved in writing by Franchisor:

- 8.3.1 During the term of this Agreement, Developer shall not, either directly or indirectly, for himself or herself or through, on behalf of, or in conjunction with, any person or entity (i) divert, or attempt to divert, any business or customer of the Developer's Baya Bar outlets or of other developers or franchisees in the System to any competitor, by direct or indirect inducement or otherwise; (ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in any retail or café business featuring acai or similarly prepared smoothies or bowls; or (iii) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System or (iv) in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize the business of the Franchisor or any Baya Bar developers or franchisees or Franchisor-affiliated outlets.

Source: Item 23 — RECEIPTS (FDD pages 56–189)

Question 48

Can the Baya Bar Franchisor choose the county where the Franchisee's principal place of business is located for arbitration?

Accepted Answer

- 20.3.2 All issues relating to arbitrability or the enforcement of the agreement to arbitrate contained in this Article 20 will be governed by the Federal Arbitration Act (9 U.S.C. §1 *et seq*.) and the federal common law of arbitration. All hearings and other proceedings will take place in Staten Island, New York, or the offices of the American Arbitration Association, or, if Franchisor so elects, in the county where the principal place of business of Franchisee is then located.

Source: Item 22 — CONTRACTS (FDD page 56)

Question 49

Can the franchisor extend the 120-day restoration period for a Baya Bar franchise after a casualty?

Accepted Answer

- 17.2.5 fails to restore the Franchised Business location to full operation within a reasonable period time but not more than one hundred twenty (120) days from the date the Franchised Business location is rendered inoperable by any casualty, as may be extended by Franchisor in Franchisor's reasonable discretion;

Source: Item 22 — CONTRACTS (FDD page 56)

Question 50

Is the Franchisor obligated to grant a Baya Bar developer the right to develop an additional outlet if the developer meets all the conditions in section 5.4?

Accepted Answer

r shall not unreasonably withhold consent for such reasonable extension provided that Developer has (i) submitted its extension request in a timely manner; (ii) demonstrated diligent efforts to meet the original Mandatory Open Date; and (iii) has at all times acted in good faith and is otherwise fulfilling its obligations under this Agreement. - 5.4 Conditions to Exercise Developer's Rights. All of the following conditions must be satisfied or waived, in Franchisor's sole discretion, before Franchisor grants Developer the right to develop an additional Baya Bar outlet in accordance with Section 4.1 hereof and pursuant to a Franchise Agreement: - 5.4.1 Developer shall (i) request Franchisor's then-current Franchise Disclosure Document, (ii) submit to Franchisor all information and other documents requested by Franchisor prior to and as a basis for the issuance of Franchise Agreements in the System, (iii) submit to Franchisor all financial statements reasonably requested by Franchisor, and (iv) satisfy Franchisor's then-current financial criteria for multi-unit franchisees. ![](_page_138_Picture_0.jpeg) - 5.4.2 Developer shall be in full compliance with this Agreement, the Mandatory Development Schedule, and all Franchise Agreements with Franchisor and any other agreement with Franchisor or Franchisor's affiliates; - 5.4.3 Developer has demonstrated the management skills necessary for competent operation, organization, customer service and record keeping of an additional Baya Bar outlet as determined by Franchisor, in Franchisor's sole discretion. - 5.5 Termination for Failure of Condition. Notwithstanding anything to the contrary contained herein, in the event that Franchisor determines, in Franchisor's sole and absolute discretion, that any condition set forth in Section 5.4 hereof cannot be satisfied, Franchisor may terminate this Agreement upon written notice to Developer. Source: Item 23 — RECEIPTS (FDD pages 56–189)

Question 51

Is the Franchisor obligated to offer a Successor Agreement to a Baya Bar franchisee?

Accepted Answer

itory. Franchisee agrees that such implementation of Franchisor's rights pursuant to this Section 3.2 is deemed not to impair or injure Franchisee's rights pursuant to Section 2 hereof.
- **4. TERM.** Unless terminated earlier in accordance with the terms set forth in this Agreement, this Agreement and the Franchise granted hereunder shall commence upon the Effective Date set forth above, and terminate on the date that is ten (10) years following the Opening Date, as defined in Section 8 hereof (the "Term").
- **5. SUCCESSOR OPTIONS.** Subject to the terms and conditions of this Agreement, Franchisee shall have the right, following the expiration of the Term hereof, to enter into a new franchise agreement and other agreements then customarily employed by Franchisor

![](_page_63_Picture_0.jpeg)

and in the form then generally being offered to prospective franchisees in the state in which the Territory is located (the "Successor Franchise Agreement") for two (2) additional terms of five (5) years. The term of each such Successor Franchise Agreement shall commence upon the date of expiration of the immediately preceding term. Franchisee shall be charged a successor agreement fee equal to Three Thousand Five Hundred Dollars (\$3,500.00) per term ("Successor Agreement Fee").

- 5.1 Form and Manner of Successor Agreement. If Franchisee desires to exercise Franchisee's option to enter into a Successor Franchise Agreement, it shall be done in the following manner:
  - 5.1.1 Not less than six (6) months prior to the expiration of the Term of this Agreement, Franchisee shall request from Franchisor in writing, a copy of Franchisor's then current Disclosure Document (including Franchisor's then current franchise agreement).
  - 5.1.2 Franchisee must execute and return to Franchisor all required documents, including any and all ancillary documents, within thirty (30) days after receipt by Franchisee of a copy of Franchisor's then current Disclosure Document.
  - 5.1.3 The Successor Franchise Agreement shall supersede this Agreement in all respects, and Franchisee understands and acknowledges that the terms of such new agreement may differ from the terms of this Agreement, including, without limitation, higher or lower royalty and other fees.
  - 5.1.4 If Franchisee fails to perform any of the acts, or deliver any of the notices required pursuant to this Paragraph 5 in a timely fashion, such failure shall be deemed an election by Franchisee not to exercise Franchisee's option to enter into the Successor Franchise Agreement, and such failure shall cause Franchisee's right and option to automatically lapse and expire, without further notice by Franchisor.
  - 5.1.5 Franchisee acknowledges that the initial Term of this Agreement provides Franchisee more than a sufficient opportunity to recoup Franchisee's investment in the Franchise, as well as a reasonable return on such investment.
- 5.2 Conditions of Successor Agreement. Franchisee's right to enter into a Successor Franchise Agreement is conditioned upon the following:
  - 5.2.1 Franchisee shall be in full compliance with this Agreement and shall have materially performed Franchisee's obligations under this Agreement, the Manual and under all other agreements that may be in effect between Franchisee and Franchisor, including but not limited to all monetary obligations.

![](_page_64_Picture_0.jpeg)

- 5.2.2 Franchisee shall not have committed three (3) or more events constituting default during the then current Term of this Agreement, whether or not such defaults were cured.
- 5.2.3 Franchisee will have completed any required additional training to Franchisor's reasonable satisfaction.
- 5.2.4 Franchisee shall have obtained the right to continue to occupy the premises of the Franchised Business following the expiration of the Term hereof for the full term of the Successor Franchise Agreement and/or have received Franchisor's approval regarding locating the Franchised Business at a new location.

Source: Item 22 — CONTRACTS (FDD page 56)

Question 52

Does the Baya Bar franchisor have to provide notice to the franchisee before terminating the Franchise Agreement for non-curable defaults?

Accepted Answer

| h. | "Cause" defined - non-curable | Sections 17.1 and | The Franchise Agreement will terminate                                                  |
|----|-------------------------------|-------------------|-----------------------------------------------------------------------------------------|
|    | defaults                      | 17.2              | automatically, without notice for the                                                   |
|    |                               |                   | following defaults: insolvency; bankruptcy;                                             |
|    |                               |                   | written admission of inability to pay debts;                                            |
|    |                               |                   | receivership; levy; composition with                                                    |
|    |                               |                   | creditors; unsatisfied final judgment for                                               |
|    |                               |                   | more than 30 days; or foreclosure                                                       |
|  |  |  | proceeding that is not dismissed within 30 |
|  |  |  | days. |
|    |                               |                   | We may terminate the Franchise                                                          |
|    |                               |                   | Agreement upon notice to you if you: do                                                 |
|    |                               |                   | not acquire a site, do not complete                                                     |
|    |                               |                   | construction, obtain permits and/or open                                                |
|    |                               |                   | the Franchised Business within required                                                 |
|    |                               |                   | time frames; falsify any report to us; cease                                            |
|    |                               |                   | operations for 5 days or more, unless the                                               |
|    |                               |                   | premises are damaged and you apply to                                                   |
|    |                               |                   | relocate; lose possession of the premises,                                              |
|    |                               |                   | unless you are not at fault for loss and you                                            |
|  |  |  | timely apply to relocate; fail to restore and |
|  |  |  | re-open the Franchised Business within |
|    |                               |                   | 120 days after a casualty, as may be                                                    |
|    |                               |                   | extended by us; fail to comply with                                                     |
|    |                               |                   | applicable laws; default under any lease                                                |
|    |                               |                   | for the premises; understate Gross                                                      |
|    |                               |                   | Revenue two (2) or more times; fail to                                                  |
|    |                               |                   | comply with insurance and indemnification                                               |
|    |                               |                   | requirements; attempt a transfer in                                                     |
|    |                               |                   | violation of the Franchise Agreement; fail,                                             |
|  |  |  | or your legal representative fails to |
|  |  |  | transfer as required upon your death or |
|    |                               |                   | permanent disability; misrepresent or omit                                              |
|    |                               |                   | a material fact in applying for the                                                     |
|    |                               |                   | Franchise; are convicted or plead no                                                    |
|    |                               |                   | contest to a felony or crime that could                                                 |
|    |                               |                   | damage the goodwill or reputation of our                                                |
|    |                               |                   | trademarks or the System; receive an                                                    |
|    |                               |                   | adverse judgment in any proceeding                                                      |
|    |                               |                   | involving allegations of fraud, racketeering                                            |
|  |  |  | or improper trade practices or similar claim |
|  |  |  | that could damage the goodwill or |
|    |                               |                   | reputation of our trademarks or the                                                     |
|    |                               |                   | System; conceal revenues or maintain                                                    |
|    |                               |                   | false books; create a threat or danger to                                               |
|    |                               |                   | public health or safety; refuse an                                                      |
|    |                               |                   | inspection or audit by us; use our                                                      |
|    |                               |                   | trademarks, copyrighted material or                                                     |
|    |                               |                   | Confidential Information in an                                                          |
|    |                               |                   | unauthorized manner; make an                                                            |
|  |  |  | unauthorized disclosure of Confidential |
|  |  |  | Information; fail to comply with non |
|    |                               |                   | competition covenants; default in the                                                   |
|    |                               |                   | performance of your obligations three (3)                                               |
|    |                               |                   | or more times during the term or receive                                                |
|    |                               |                   | two (2) or more default notices in any 12-                                              |
|    |                               |                   | month period; default under any other                                                   |
|    |                               |                   | agreement with us or our affiliate; have                                                |
|    |                               |                   | insufficient funds to honor a check or EFT                                              |
|    |                               |                   | two (2) or more times within any twelve                                                 |
|    |                               |                   | (12)-month period; or terminate the                                                     |
|    |                               |                   | Franchise Agreement without cause.                                                      |

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 43–52)

Question 53

Can the Baya Bar franchisor's discretion to extend the restoration period after a casualty be considered unreasonable?

Accepted Answer

- 17.2.5 fails to restore the Franchised Business location to full operation within a reasonable period time but not more than one hundred twenty (120) days from the date the Franchised Business location is rendered inoperable by any casualty, as may be extended by Franchisor in Franchisor's reasonable discretion;

Source: Item 22 — CONTRACTS (FDD page 56)

Question 54

What happens to a Baya Bar franchisee's designated territory if it includes a minimum population and shifts occur?

Accepted Answer

As part of the process of granting a successor Franchise Agreement, we have the right to re-evaluate your then-existing Designated Territory according to certain demographics, including population. Since your Designated Territory includes a certain minimum population, your Designated Territory under the successor Franchise Agreement will be modified to accommodate shifts and changes in population. Our intent is to make the target demographics of your successor Designated Territory similar to the target demographics of your original Designated Territory. A re-evaluation of your Designated Territory may result in your successor Designated Territory being smaller or larger than your original Designated Territory. We cannot guarantee that you will achieve any particular level of success with the renewal Designated Territory or that your results will be the same as or similar to your results from operating in the original Designated Territory. This is applicable only if your Designated Territory includes a minimum population because it is located in an urban setting, as described above.

Source: Item 12 — TERRITORY (FDD pages 36–40)

Question 55

What happens if Baya Bar concludes that the franchisee does not have the ability to satisfactorily operate the Franchised Business?

Accepted Answer

If (a) you fail to complete the pre-opening training program to our satisfaction, after having given you the opportunity to re-take our pre-opening training program at your expense or (b) we conclude, no more than ten days after you complete the pre-opening training program, that you do not have the ability to satisfactorily operate your Franchised Business, then we have the right to terminate your Franchise Agreement. If we terminate your Franchise Agreement, we will refund your initial franchise fee less any out-of-pocket costs we have incurred. You must sign any documents we require, including a confidentiality agreement and general release, before any money will be refunded to you. The initial franchise fee is not refundable under any other circumstances.

Source: Item 5 — INITIAL FEES (FDD pages 10–11)

Question 56

What happens if the Baya Bar developer fails to comply with their obligations under the Development Agreement?

Accepted Answer

- 7.3 Curable Defaults. Developer shall be deemed to be in material default and Franchisor may, at its option, terminate this Agreement and all rights granted hereunder, if Developer fails to cure the default within the time period set forth in this Section 7.3, effective immediately upon notice to Developer, if Developer: ![](_page_143_Picture_0.jpeg) - 7.2.1 has misrepresented or omitted material facts in applying for the development rights granted hereunder; - 7.2.2 falsifies any report required to be furnished Franchisor hereunder; - 7.2.3 fails to comply with any federal, state or local law, rule or regulation, applicable to the development and operations of Developer's Baya Bar outlets, including, but not limited to, the failure to pay taxes; - 7.2.4 fails to develop the Baya Bar outlets in accordance with the Mandatory Development Schedule. - 7.2.5 attempts a Transfer in violation of the provisions of Article 6 of this Agreement; - 7.2.6 is convicted of, or pleads no contest to, a felony or to a crime that could damage the goodwill associated with the Marks or does anything that may harm the reputation of the System or the goodwill associated with the Marks; - 7.2.7 receives an adverse judgment or a consent decree in any case or proceeding involving allegations of fraud, racketeering, unfair or improper trade practices or similar claim which is likely to have an adverse effect on the System, or the Marks, the goodwill associated therewith or Franchisor's interest therein, in Franchisor's sole opinion; - 7.2.8 fails to comply with the non-disclosure and non-competition covenants in Article 8 hereof: - 7.2.9 defaults, or an affiliate of Developer defaults, under any other agreement, including any Franchise Agreement, with Franchisor, or any of Franchisor's affiliates or suppliers, or a landlord and does not cure such default within the time period provided in such other agreement; or - 7.2.10 terminates this Agreement without cause. Source: Item 23 — RECEIPTS (FDD pages 56–189)

Question 57

What happens if a Baya Bar franchisee fails to attend mandatory additional training or the national business meeting?

Accepted Answer

Franchisee's failure to attend and/or complete mandatory additional training or failure to attend Franchisor's national business meeting or annual convention is a default of this Agreement. Franchisee or Franchisee's principal(s) shall be required to obtain any missed mandatory additional training at a location Franchisor designates. Franchisee shall pay all costs and expenses for such additional training, including but not limited to, tuition at the then-current rate and any and all transportation, meals and lodging of Franchisee, Franchisee's principal and Franchisor's training personnel. Franchisee shall pay to Franchisor any incurred expenses by Franchisor's training personnel within ten (10) days of Franchisor's billing thereof to Franchisee.

Source: Item 22 — CONTRACTS (FDD page 56)

Question 58

What happens if a Baya Bar franchisee fails to complete the pre-opening training program to the franchisor's satisfaction?

Accepted Answer

uniformly on all franchisees.

If (a) you fail to complete the pre-opening training program to our satisfaction, after having given you the opportunity to re-take our pre-opening training program at your expense or (b) we conclude, no more than ten days after you complete the pre-opening training program, that you do not have the ability to satisfactorily operate your Franchised Business, then we have the right to terminate your Franchise Agreement. If we terminate your Franchise Agreement, we will refund your initial franchise fee less any out-of-pocket costs we have incurred. You must sign any documents we require, including a confidentiality agreement and general release, before any money will be refunded to you. The initial franchise fee is not refundable under any other circumstances.

**Multi-Unit Development Agreement**: If you and we agree that you will develop and operate multiple Baya Bar Franchised Businesses, then you will pay to us a development fee equal to 100% of the initial franchise fee for the first Shop to be developed, plus 50% of the reduced initial franchise fee for each additional Shop you commit to develop under the MUDA. For example, if you commit to develop three Shops, the development fee is calculated as \$35,000 + (50% of \$30,000=\$15,000) + (50% of \$25,000=\$12,500) = \$62,500. The development fee is imposed uniformly on all multi-unit developers and is fully earned by us when received. These franchise fees are refundable only as described above under the Franchise Agreement.

Source: Item 5 — INITIAL FEES (FDD pages 10–11)

Question 59

What happens if a Baya Bar franchisee fails to request the Disclosure Document or return required documents in a timely manner regarding a successor agreement?

Accepted Answer

- 5.1 Form and Manner of Successor Agreement. If Franchisee desires to exercise Franchisee's option to enter into a Successor Franchise Agreement, it shall be done in the following manner:
  - 5.1.1 Not less than six (6) months prior to the expiration of the Term of this Agreement, Franchisee shall request from Franchisor in writing, a copy of Franchisor's then current Disclosure Document (including Franchisor's then current franchise agreement).
  - 5.1.2 Franchisee must execute and return to Franchisor all required documents, including any and all ancillary documents, within thirty (30) days after receipt by Franchisee of a copy of Franchisor's then current Disclosure Document.
  - 5.1.3 The Successor Franchise Agreement shall supersede this Agreement in all respects, and Franchisee understands and acknowledges that the terms of such new agreement may differ from the terms of this Agreement, including, without limitation, higher or lower royalty and other fees.
  - 5.1.4 If Franchisee fails to perform any of the acts, or deliver any of the notices required pursuant to this Paragraph 5 in a timely fashion, such failure shall be deemed an election by Franchisee not to exercise Franchisee's option to enter into the Successor Franchise Agreement, and such failure shall cause Franchisee's right and option to automatically lapse and expire, without further notice by Franchisor.

Source: Item 22 — CONTRACTS (FDD page 56)

Question 60

What happens if Baya Bar is not offering new franchises, revising agreements, or cannot lawfully offer the current Successor Franchise Agreement?

Accepted Answer

ice to Franchisee prior to the expiration of the Term, this Agreement shall remain in effect on a month-to-month basis until Franchisor has given the notice required by such applicable law. If Franchisor is not offering new Baya Bar franchises, is in the process of revising, amending or signing the Franchisor's Successor Agreement form of franchise agreement or disclosure document, or Franchisor is not lawfully able to offer Franchisee the then current form of Successor Franchise Agreement at the time Franchisee advises Franchisor pursuant to Paragraph 5.2 hereof that Franchisee desires to sign a Successor Agreement, Franchisor may, in Franchisor's sole discretion, (i) offer to sign this Successor Agreement upon the same terms set forth herein for the appropriate successor term or (ii) offer to extend the Term hereof on a month-to-month basis following the expiration of the Term for as long as Franchisor deems necessary or appropriate so that Franchisor may lawfully offer the then current form of Successor Franchise Agreement. Any timeframes specified in this Paragraph 5 shall be inclusive of any state mandated notice periods.

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5.4 Additional Reservation of Rights.

Source: Item 22 — CONTRACTS (FDD page 56)

Question 61

For Baya Bar, where must all hearings and other arbitration proceedings take place if the Franchisor elects the county where the principal place of business of the Developer is located?

Accepted Answer

- 10.3.2 All issues relating to arbitrability or the enforcement of the agreement to arbitrate contained in this Article 10 will be governed by the Federal Arbitration Act (9 U.S.C. §1 *et seq.*) and the federal common law of arbitration. All hearings and other proceedings will take place in Staten Island, New York, or the offices of the American Arbitration Association, or, if Franchisor so elects, in the county where the principal place of business of Developer is then located.

Source: Item 23 — RECEIPTS (FDD pages 56–189)

Question 62

If I am opening my second Baya Bar shop, does Baya Bar have the right to reduce the duration of the representative's visit?

Accepted Answer

For the opening of the Shop, we will provide you with one of our representatives. The trained representative will provide onsite pre-opening and opening training, supervision and assistance to you for seven to ten days prior to your Shop opening. If you request that our representative provide additional days of onsite assistance, you must reimburse the expenses our representative incurs while providing the additional assistance, including travel, lodging and meals and our per diem fee. If you are opening your second (or later) Shop, we have the right to reduce the duration of our representative's visit or to not provide opening assistance.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 26–36)

Question 63

If a Baya Bar Developer defaults under another agreement, what condition must be met for it to trigger termination of the Development Agreement?

Accepted Answer

- 7.2.9 defaults, or an affiliate of Developer defaults, under any other agreement, including any Franchise Agreement, with Franchisor, or any of Franchisor's affiliates or suppliers, or a landlord and does not cure such default within the time period provided in such other agreement; or

Source: Item 23 — RECEIPTS (FDD pages 56–189)

Question 64

If a Baya Bar Developer's affiliate defaults under an agreement with the Franchisor, does the Developer have an opportunity to cure the default?

Accepted Answer

- 7.2.9 defaults, or an affiliate of Developer defaults, under any other agreement, including any Franchise Agreement, with Franchisor, or any of Franchisor's affiliates or suppliers, or a landlord and does not cure such default within the time period provided in such other agreement;

Source: Item 23 — RECEIPTS (FDD pages 56–189)

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