What is the Beverly Anns Cookie franchisee's obligation if the equipment is damaged or destroyed?
Beverly_Anns_Cookie Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee must present evidence to Franchisor, as required by Franchisor in its sole discretion, that Franchisee no longer owns the Additional Equipment prior to Franchisee being excused from paying any further Additional Equipment Royalties. Franchisee shall not be entitled to receive a refund on any Additional Equipment Royalty paid. Franchisee acknowledges and agrees that the Additional Equipment Royalty may increase upon renewal of the Franchise Agreement and agrees to pay Franchisor the thencurrent Royalty amount upon any such renewal.
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
The 2025 Beverly Anns Cookie Franchise Disclosure Document discusses additional equipment and royalties, but it does not specify the franchisee's obligations regarding equipment damage or destruction. However, the document does state that the franchisee must provide evidence to Beverly Ann's Cookie that they no longer own the additional equipment before being excused from paying further additional equipment royalties.
Because the FDD does not specify obligations for damaged or destroyed equipment, prospective franchisees should inquire with Beverly Ann's Cookie about their policies on damaged or destroyed equipment. Understanding the obligations for equipment that is damaged, destroyed, or otherwise unusable is an important aspect of understanding the full costs and responsibilities of the franchise.
In the absence of explicit details in the FDD, it is standard practice to discuss scenarios like equipment damage with the franchisor during due diligence. Clarifying these points ensures that the franchisee is prepared for unforeseen circumstances and understands the financial implications involved.