Does a Chocolate Bash franchisee have the right to establish additional franchised outlets without a Multi-Unit Development Agreement?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
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, a franchisee does not have the right to establish additional franchised outlets unless they sign a Multi-Unit Development Agreement (MUDA). If a MUDA is signed, the franchisee gains the right to establish a mutually-agreed number of additional outlets.
However, this right to develop additional Chocolate Bash outlets under a MUDA is subject to certain conditions. The franchisee must comply with a mutually-agreed development schedule, possess sufficient financial and organizational capacity to develop, open, operate, and manage each additional Chocolate Bash business, be in compliance with all brand requirements at their open Chocolate Bash businesses, and not be in default under any other agreement with Chocolate Bash.
Chocolate Bash will approve the location of future sites and territories for those sites, and their then-current standards for sites and territories will apply. This means that even with a MUDA, the franchisee's ability to expand is contingent on meeting specific criteria and obtaining Chocolate Bash's approval for locations and territories.