What is the effect of termination on obligations that survive termination for a Chocolate Bash franchise?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
14.3 Effect of Termination. Upon termination or expiration of this Agreement, all obligations that by their terms or by reasonable implication survive termination, including those pertaining to non-competition, confidentiality, indemnity, and dispute resolution, will remain in effect, and Franchisee must immediately:
(i) pay all amounts owed to CB Franchising based on the operation of the Business through the effective date of termination or expiration;
(ii) return to CB Franchising all copies of the Manual, Confidential Information and any and all other materials provided by CB Franchising to Franchisee or created by a third party for Franchisee relating to the operation of the Business, and all items containing any Marks, copyrights, and other proprietary items; and delete all Confidential Information and proprietary materials from electronic devices;
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to the 2024 Chocolate Bash Franchise Disclosure Document, upon termination or expiration of the Franchise Agreement, all obligations that by their terms or reasonable implication survive termination will remain in effect. These include obligations pertaining to non-competition, confidentiality, indemnity, and dispute resolution. This means that even after the franchise agreement ends, certain responsibilities and restrictions continue to bind the franchisee.
Specifically, the franchisee must immediately pay all amounts owed to Chocolate Bash based on the operation of the business through the effective date of termination or expiration. Additionally, the franchisee is required to return all copies of the Manual, Confidential Information, and any other materials provided by Chocolate Bash, including items containing Marks, copyrights, and other proprietary items. The franchisee must also delete all Confidential Information and proprietary materials from electronic devices.
These stipulations ensure that Chocolate Bash's proprietary information and brand reputation are protected even after a franchise ceases operation. The non-compete obligations prevent former franchisees from directly competing with Chocolate Bash within a specified area and timeframe, while confidentiality obligations safeguard sensitive business information. The franchisee is also responsible for removing any branding or signage to de-identify the location as a Chocolate Bash business within 30 days of termination or expiration.