When does the developer execute an additional Franchise Agreement for subsequent Baya Bar outlets after the first?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
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:
Source: Item 23 — RECEIPTS (FDD pages 56–189)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, a developer executes an additional Franchise Agreement for subsequent outlets upon the execution of a lease for each Baya Bar outlet to be developed. This is provided that all conditions outlined in Section 5.4 are either satisfied or waived. These conditions include requesting the current Franchise Disclosure Document, submitting required information and documents, providing financial statements, and meeting the franchisor's financial criteria for multi-unit franchisees.
Specifically, after signing the initial agreement and the first Franchise Agreement, the developer must execute an additional Franchise Agreement for the second Baya Bar outlet upon executing a lease for the first outlet. For each subsequent outlet beyond the second, another Franchise Agreement must be executed when a lease is secured for that specific outlet. This process aligns with the Mandatory Development Schedule, which the developer must adhere to, with potential extensions available under certain conditions.
Failure to meet the Mandatory Development Schedule can result in a default under the agreement. The franchisor also requires that the developer be in full compliance with all agreements and demonstrate the necessary management skills for operating additional Baya Bar outlets. This ensures that the developer is prepared and capable of successfully managing multiple locations, maintaining the brand's standards and operational efficiency.