What condition must be satisfied or waived before executing an additional Franchise Agreement for the second Baya Bar outlet?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
r and Developer. Developer hereby acknowledges and agrees that the training Developer receives pursuant
- 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)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, after signing the initial Franchise Agreement, the execution of an additional Franchise Agreement for the second Baya Bar outlet hinges on satisfying or waiving the conditions outlined in Section 5.4. Furthermore, the franchisee must have executed a lease for their first Baya Bar outlet. These conditions must be met to proceed with developing the second outlet under the Mandatory Development Schedule.
Section 5.4.1 requires the developer to request the current Franchise Disclosure Document, submit all requested information and documents, provide all financial statements reasonably requested, and satisfy the current financial criteria for multi-unit franchisees.
Section 5.4.2 mandates full compliance with the Development Agreement, the Mandatory Development Schedule, all Franchise Agreements with Baya Bar, and any other agreements with Baya Bar or its affiliates. Section 5.4.3 requires the franchisee to demonstrate the necessary management skills for competent operation, organization, customer service, and record keeping of an additional Baya Bar outlet, as determined by Baya Bar in its sole discretion.
If Baya Bar determines that any of these conditions cannot be satisfied, it reserves the right to terminate the Development Agreement, although this termination will not affect the validity of any other agreements between Baya Bar and the developer, provided the developer is in full compliance with those agreements.