What is the Chocolate Bash franchisee's right regarding termination of the MUDA?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
- 5. Limitation of Liability. Franchisee's commitment to develop Chocolate Bash businesses is in the nature of an option only. If CB Franchising terminates this MUDA for Franchisee's default, Franchisee shall not be liable to CB Franchising for lost future revenues or profits from the unopened Chocolate Bash businesses. Franchisee may terminate this MUDA at any time.
Source: Item 23 — RECEIPTS (FDD pages 39–101)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, a franchisee has the right to terminate the Multi-Unit Development Agreement (MUDA) at any time. This provides a significant degree of flexibility for the franchisee.
However, it's important to note that while the franchisee can terminate the MUDA, Chocolate Bash also has specific conditions under which they can terminate the agreement. These conditions include the franchisee failing to meet the development schedule outlined in the MUDA or if Chocolate Bash has the right to terminate any existing franchise agreement with the franchisee due to a default.
Despite Chocolate Bash's right to terminate the MUDA under certain conditions, the document clarifies that if Chocolate Bash terminates the MUDA due to the franchisee's default, the franchisee will not be held liable for any lost future revenues or profits from Chocolate Bash businesses that were not yet opened. This limitation of liability offers some protection to the franchisee in the event of a termination initiated by Chocolate Bash.