What is the definition of 'material modification' in the context of the Bombs Away franchise agreement in California?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
California limited liability companies Code, Section 31125 requires the franchisor to give the franchisee a disclosure document, approved by the Department of Financial Protection and Innovation, 14-days prior to the execution of an agreement or the solicitation of a proposed material modification of an existing agreement.
Source: Item 23 — RECEIPTS (FDD pages 36–117)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, California law requires that Bombs Away provide a disclosure document approved by the Department of Financial Protection and Innovation to prospective franchisees 14 days before the execution of an agreement. This 14-day disclosure period also applies before Bombs Away solicits a proposed material modification of an existing agreement.
This means that if Bombs Away wants to change the terms of an existing franchise agreement in California in a way that is considered a 'material modification,' they must provide the franchisee with an updated disclosure document at least 14 days before the franchisee agrees to the change. This gives the franchisee time to review the proposed modification and seek legal advice if needed.
The FDD does not define what constitutes a 'material modification.' A prospective Bombs Away franchisee in California should seek clarification from Bombs Away regarding what specific changes to the franchise agreement would be considered 'material' and thus trigger the 14-day disclosure requirement.