What are the development schedule requirements for opening additional Chocolate Bash locations under a MUDA?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
nces beyond your control.
You do not have the right to establish additional franchised outlets unless you sign a Multi-Unit Development Agreement ("MUDA") in the form attached as Exhibit C to this disclosure document. If you and we sign a MUDA, then you will have the right establish a mutually-agreed number of additional outlets. Under the MUDA, your right to develop additional outlets is subject to (1) you must comply with the mutually-agreed development schedule, (2) you must have
sufficient financial and organizational capacity to develop, open, operate, and manage each additional Chocolate Bash business, (3) you must be in compliance with all brand requirements at your open Chocolate Bash business(es), and (4) you must not be in default under any other agreement with us. We will approve the location of future sites and territories for those sites, and our then-current standards for sites and territories will apply.
Source: Item 12 — TERRITORY (FDD pages 25–26)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, franchisees who sign a Multi-Unit Development Agreement (MUDA) gain the right to establish an agreed-upon number of additional Chocolate Bash outlets. However, this right is contingent upon several factors.
The primary condition is that the franchisee must adhere to a mutually agreed-upon development schedule. Additionally, the franchisee needs to demonstrate sufficient financial and organizational capacity to successfully develop, open, operate, and manage each new Chocolate Bash business. Furthermore, all existing Chocolate Bash businesses operated by the franchisee must be in full compliance with brand standards. Finally, the franchisee must not be in default under any other agreements with Chocolate Bash.
Failure to meet the development schedule outlined in the MUDA can result in termination of the agreement by Chocolate Bash, without an opportunity for the franchisee to remedy the situation. However, the document also states that the franchisee's commitment to develop additional Chocolate Bash businesses is treated as an option, meaning that if the MUDA is terminated due to the franchisee's default, the franchisee will not be liable to Chocolate Bash for lost future revenues or profits from the unopened locations. The franchisee also has the option to terminate the MUDA at any time.