Is CB Franchising obligated to pay amounts owed by a Chocolate Bash franchisee to suppliers?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
- 4.9 Reimbursement. CB Franchising may (but is never obligated to) pay on Franchisee's behalf any amount that Franchisee owes to a supplier or other third party.
If CB Franchising does so or intends to do so, Franchisee shall pay such amount plus a 10% administrative charge to CB Franchising within 15 days after invoice by CB Franchising accompanied by reasonable documentation.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to the 2024 Chocolate Bash Franchise Disclosure Document, CB Franchising is generally not obligated to pay amounts that a franchisee owes to suppliers or other third parties. However, Chocolate Bash may choose to pay these amounts on the franchisee's behalf.
Specifically, if Chocolate Bash opts to pay an amount the franchisee owes to a supplier or other third party, the franchisee is then obligated to reimburse Chocolate Bash for that amount. The franchisee must also pay a 10% administrative charge on top of the original amount. This reimbursement, along with the administrative fee, is due to Chocolate Bash within 15 days of receiving an invoice with reasonable documentation.
This arrangement provides Chocolate Bash with the option to assist franchisees in managing their financial obligations, but it does not create an obligation for them to do so. It also allows Chocolate Bash to recover its costs and a small administrative fee for providing this service. For a prospective franchisee, this means they should not rely on Chocolate Bash to cover their debts, but they may have the option to request assistance in certain situations, understanding that it will come with additional costs.