What is the Chocolate Bash franchisee's obligation regarding developing and opening the franchise?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
[Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING]
Item 11 FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING
Except as listed below, we are not required to provide you with any assistance.
Our Pre-Opening Obligations
Before you open your business:
- A. Your site. We will review and advise you regarding potential locations that you submit to us. (Section 5.4). If you sign a Multi-Unit Development Agreement, we will approve the location of future sites and territories for those sites, and our then-current standards for sites and territories will apply. We are not obligated to further assist you in locating a site or negotiating the purchase or lease of the site.
- (i) We generally do not own your premises.
- (ii) If your site is not already known and approved by us when you sign your franchise agreement, then we and you will specify in your franchise agreement the area in which you must select a site (Franchise Agreement, Summary Page). We do not select your site. Your site is subject to our approval. To obtain our approval, you must provide all information and documents about the site that we require.
- (iii) The factors we consider in approving sites are general location and neighborhood, competition, trade area demographics, traffic patterns, parking, size, physical characteristics of existing buildings, and lease terms.
- (iv) The time limit for us to approve or disapprove your proposed site is 30 days after you submit all of our required documents and information. (Section 6.1). If we and you cannot agree on a site, you will be unable to comply with your obligation to develop and open the franchise by the deadline stated in the franchise agreement. Unless we agree to extend the deadline, you will be in default and we may terminate your franchise agreement.
- (v) We are not obligated to assist you in conforming the premises of your site to local ordinances and building codes and obtaining any required permits. This will be your responsibility.
- B. Constructing, remodeling, or decorating the premises. We will provide you with a set of our standard building plans and specifications and/or standard recommended floor plans, and our specifications for required décor. (Section 5.4)
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 19–25)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, franchisees have several obligations in developing and opening their franchise. Chocolate Bash will review and advise on potential locations submitted by the franchisee, but the franchisee is responsible for selecting the site within a specified area outlined in the franchise agreement. The site is subject to Chocolate Bash's approval based on factors like location, competition, demographics, traffic, parking, size, building characteristics, and lease terms. Chocolate Bash has 30 days to approve or disapprove a proposed site after receiving all required documents. Failure to agree on a site can result in the franchisee being unable to meet the opening deadline, potentially leading to default and termination of the franchise agreement unless an extension is granted. The franchisee is responsible for conforming the premises to local ordinances and obtaining necessary permits.
Chocolate Bash will provide standard building plans, specifications, and recommended floor plans, along with décor specifications. Franchisees must also develop a market introduction plan and obtain Chocolate Bash's approval at least 30 days before the projected opening date. The typical time frame between signing the franchise agreement and opening the business is about 6 months, but this can vary based on factors such as securing a lease, obtaining financing, developing the location, acquiring permits and licenses, and hiring employees.
Furthermore, franchisees are required to buy or lease and use a point-of-sale system and computer system, estimated to cost between $1,000 and $2,000. These systems are essential for managing day-to-day business operations. Franchisees must also upgrade or update these systems when Chocolate Bash determines it necessary, with no contractual limit on the frequency or cost of these updates. After opening, franchisees must spend at least 4% of gross sales each month on marketing their business. Franchisees must also contribute 1% of gross sales per week to Chocolate Bash's Marketing Fund.