What is the 'Development Area' in the context of a Baya Bar Multi-Unit Development Agreement?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
In certain circumstances, we will offer the right to enter into a Multi-Unit Development Agreement in the form attached as Exhibit C to this Disclosure Document (the "MUDA") to develop multiple Franchised Businesses to be located within a specifically described geographic area (the "Development Area"). We will determine the Development Area before you sign the MUDA and it will be included in the MUDA. You must establish the agreed upon number of Franchised Businesses within the Development Area according to a minimum performance schedule (the "Minimum Performance Schedule"), and you must sign a separate Franchise Agreement for each Shop established under the MUDA.
The Franchise Agreement for the first Shop developed under the MUDA will be in the form attached as Exhibit B to this Disclosure Document and we expect that you will sign the first Franchise Agreement at the same time you sign the MUDA. For each additional Shop developed under the MUDA, you must sign our then-current form of Franchise Agreement, which may be different from the form of Franchise Agreement included in this Disclosure Document. The size of the Development Area will vary depending upon local market conditions and the number of Shops to be developed.
Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS, AND AFFILIATES (FDD pages 6–9)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, the Development Area is a specifically described geographic area within which a franchisee who enters into a Multi-Unit Development Agreement (MUDA) is authorized to develop multiple Baya Bar Franchised Businesses. The franchisor determines the Development Area before the franchisee signs the MUDA, and this area is included in the MUDA.
This means that if a prospective franchisee is interested in opening multiple Baya Bar locations, they may have the option to sign a MUDA, which grants them the right to develop a certain number of franchises within a pre-defined geographic region. The size and location of the Development Area are determined by Baya Bar based on local market conditions and the number of shops the franchisee commits to developing.
It is important to note that the franchisee must adhere to a Minimum Performance Schedule, meaning they must establish the agreed-upon number of Baya Bar locations within the Development Area according to a set timeline. Additionally, the franchisee must sign a separate Franchise Agreement for each individual Baya Bar shop they establish under the MUDA. The Franchise Agreement for the first shop developed under the MUDA will be in the form attached as an exhibit to the FDD, and is expected to be signed at the same time as the MUDA. For each additional shop, the franchisee must sign Baya Bar's then-current form of Franchise Agreement, which may differ from the original form included in the FDD.
Prospective franchisees should carefully consider the terms of the MUDA, including the size and location of the Development Area, the Minimum Performance Schedule, and the requirements for signing separate Franchise Agreements for each location. They should also be aware that the terms of the Franchise Agreement may change over time, and that they will be bound by the then-current form of Franchise Agreement for each additional shop they develop under the MUDA.