Does the Chocolate Bash FDD include an exhibit containing State Addenda to the Disclosure Document?

Yes, according to the 2024 Chocolate Bash Franchise Disclosure Document, Exhibit E contains the State Addenda to the Disclosure Document. The receipt acknowledgment that a prospective franchisee signs confirms that the disclosure document includes this exhibit.

Specifically, Exhibit E includes a California Addendum to the Disclosure Document. This addendum addresses various aspects of California franchise law, including requirements for disclosure documents, franchise agreements, and franchisee rights. It states that California Corporations Code requires the franchisor to provide a disclosure document approved by the Department Of Financial Protection and Innovation before any material modification of an existing franchise is solicited.

The addendum also clarifies how certain provisions of the franchise agreement apply in California, such as those related to non-compete covenants, waivers of claims, and termination rights. For example, it notes that a covenant not to compete extending beyond the termination of the franchise may not be enforceable under California law. Additionally, it states that the Department has determined that Chocolate Bash has not demonstrated they are adequately capitalized and/or that they must rely on franchise fees to fund their operations. The Commissioner has imposed a fee deferral condition, which requires that Chocolate Bash defers the collection of all initial fees from California franchisees until they have completed all of their pre-opening obligations and the franchisee is open for business.

For a prospective Chocolate Bash franchisee, this means that the FDD contains state-specific information relevant to their location, particularly if they are in California. It is important to carefully review these addenda, as they can modify or supersede the general terms of the franchise agreement to comply with local laws. Franchisees should pay close attention to provisions regarding fees, termination, and dispute resolution, as these may be subject to specific state regulations.