In its business practices, what standards of conduct must a Chocolate Bash franchisee maintain?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
grams, membership/subscription programs, or customer incentive programs, designated by CB Franchising, in the manner specified by CB Franchising in the Manual or otherwise in writing. Franchisee shall honor all valid gift cards and other pre-paid systems, regardless of whether issued by Franchisee or another Chocolate Bash business. Franchisee shall comply with all procedures and specifications of CB Franchising related to gift cards, certificates, and other pre-paid systems, or related to customer loyalty, membership/subscription, or customer incentive programs.
- 7.12 Maintenance and Repair. Franchisee shall at all times keep the Business in a neat and clean condition, perform all appropriate maintenance, and keep all physical property in good repair. In addition, Franchisee shall promptly perform all work on the physical property of the Business as CB Franchising may prescribe from time to time, including but not limited to periodic interior and exterior painting; resurfacing of the parking lot; roof repairs; and replacement of obsolete or worn out signage, floor coverings, furnishings, equipment and décor. Franchisee acknowledges that the System Standards may include requirements for cleaning, maintenance, and repair.
- 7.13 Remodeling. In addition to Franchisee's obligations to comply with all System Standards in effect from time to time, CB Franchising may require Franchisee to undertake and complete a Remodel of the Location to CB Franchising's satisfaction. Franchisee must complete the Remodel in the time frame specified by CB Franchising. CB Franchising may require the Franchisee to submit plans for CB Franchising's reasonable approval prior to commencing a required Remodel. CB Franchising's right to require a Remodel is limited as follows: (i) the Remodel will not be required in the first two or last two years of the term (except that a Remodel may be required as a condition to renewal of the term or a Transfer), and (ii) a Remodel will not be required more than once every five years from the date on which Franchisee was required to complete the prior Remodel.
- 7.14 Meetings. The Principal Executive shall use reasonable efforts to attend all in-person meetings and remote meetings (such as telephone conference calls) that CB Franchising requires, including any national or regional brand conventions. Franchisee shall not permit the Principal Executive to fail to attend more than three consecutive required meetings.
7.15 Insurance.
- (a) Franchisee shall obtain and maintain insurance policies in the types and amounts as specified by CB Franchising in the Manual. If not specified in the Manual, Franchisee shall maintain at least the following insurance coverage:
- (i) "Special" causes of loss coverage forms, including fire and extended coverage, crime, vandalism, and malicious mischief, on all property of the Business, for full repair and replacement value (subject to a reasonable deductible);
- (ii) Business interruption insurance covering at least 12 months of income;
- (iii) Commercial General Liability insurance, including products liability coverage, and broad form commercial liability coverage, written on an "occurrence" policy form in an amount of not less than $1,000,000 single limit per occurrence and $2,000,000 aggregate limit; and
- (iv) Workers Compensation coverage as required by state law.
- (b) Franchisee's policies (other than Workers Compensation) must (1) list CB Franchising and its affiliates as an additional insured, (2) include a waiver of subrogation in favor of CB Franchising and its affiliates, (3) be primary and non-contributing with any insurance carried by CB Franchising or its affiliates, and (4) stipulate that CB Franchising shall receive 30 days' prior written notice of cancellation.
- (c) Franchisee shall provide Certificates of Insurance evidencing the required coverage to CB Franchising prior to opening and upon annual renewal of the insurance coverage, as well as at any time upon request of CB Franchising.
- 7.16 Suppliers and Landlord. Franchisee shall pay all vendors and suppliers in a timely manner. If Franchisee leases the Location, Franchisee shall comply with its lease for the Location.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, franchisees must adhere to several standards of conduct in their business practices. These standards cover various aspects of the business, including honoring gift cards, maintaining the premises, complying with system standards, and managing public relations. Franchisees are required to honor all valid gift cards and pre-paid systems, regardless of who issued them, and must follow Chocolate Bash's procedures related to these systems and customer loyalty programs.
Maintaining a clean and well-repaired business location is crucial. Franchisees must keep their Chocolate Bash location in neat condition, perform regular maintenance, and ensure all physical property is in good repair. This includes undertaking remodeling as required by Chocolate Bash, within specified time frames and with prior approval of plans. Franchisees must also ensure their Principal Executive attends all required meetings, with a limit of no more than three consecutive missed meetings.
Further, franchisees must use only the trademarks and service marks authorized by Chocolate Bash and comply with any changes to these marks. They are also obligated to pay vendors and suppliers on time and adhere to their lease agreements. Public statements about Chocolate Bash or any incidents related to the business require prior written approval from Chocolate Bash. Franchisees are restricted from engaging in any activity at the location other than operating the Chocolate Bash business and, if the franchisee is an entity, they cannot operate any other businesses besides Chocolate Bash franchises. These standards collectively ensure that franchisees maintain a consistent brand image and operational quality, aligning with Chocolate Bash's overall business model and reputation.