Can CB Franchising require a Chocolate Bash franchisee to remodel their location?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, CB Franchising has the right to require franchisees to remodel their locations to meet current brand standards. The FDD specifies that Chocolate Bash may require a franchisee to undertake and complete a remodel of their location to CB Franchising's satisfaction, and within a timeframe specified by them. Franchisees may also be required to submit remodel plans for approval before starting the work. The document defines "Remodel" as a refurbishment, renovation, and remodeling of the Location to conform to current standards for building design, exterior facade, trade dress, signage, fixtures, furnishings, equipment, decor, color schemes, presentation of the Marks, and other System Standards.
However, there are some limitations to this requirement. Chocolate Bash cannot require a remodel during the first two or last two years of the franchise term, with the exception of a remodel required as a condition for renewal or transfer of the franchise. Additionally, remodels cannot be required more than once every five years, calculated from the completion date of the previous remodel.
This means that as a Chocolate Bash franchisee, you need to be prepared for the possibility of undertaking a significant remodel of your location every few years to keep it aligned with the brand's current image. This can involve substantial costs, so it's important to factor these potential expenses into your financial planning. Understanding the timing and frequency of required remodels, as well as the potential costs, is crucial for assessing the long-term financial viability of the franchise.