When are the franchise fees due for Chocolate Bash units under a Multi-Unit Development Agreement?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
- (b) Payment**.** Upon execution of this MUDA, Franchisee shall pay the total Initial Franchise Fee to CB Franchising. The Initial Franchise Fee is non-refundable.
- 2. Form of Agreement. For Store #1, Franchisee and CB Franchising have executed the Franchise Agreement simultaneously with this MUDA. For each additional Chocolate Bash franchise, Franchisee shall execute CB Franchising's then-current standard form of franchise agreement no later than three business days after Franchisee leases or acquires a location. This MUDA does not give Franchisee the right to construct, open, or operate a Chocolate Bash business, and Franchisee acknowledges that Franchisee may construct, open, and operate each Chocolate Bash business only pursuant to a separate franchise agreement executed pursuant to this MUDA for each such Chocolate Bash business.
Source: Item 5 — INITIAL FEES (FDD page 9)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, if a franchisee signs a Multi-Unit Development Agreement (MUDA), they must pay the total initial franchise fee upon the execution of the MUDA. This fee is non-refundable. For the first store, the franchisee and Chocolate Bash execute the Franchise Agreement simultaneously with the MUDA.
For each additional Chocolate Bash franchise, the franchisee must execute Chocolate Bash's current standard form of franchise agreement no later than three business days after leasing or acquiring a location. The MUDA does not grant the franchisee the right to construct, open, or operate a Chocolate Bash business until a separate franchise agreement is executed for each location.
For franchisees in California who sign a development agreement, the payment of the development and initial fees attributable to a specific unit in the development schedule is deferred until that unit is open. This condition is imposed because Chocolate Bash has not demonstrated that they are adequately capitalized and/or that they must rely on franchise fees to fund their operations.