What liability does CB Franchising have to a Chocolate Bash franchisee regarding the location of the business?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
(a) Selecting Location. CB Franchising shall provide its criteria for Chocolate Bash locations to Franchisee. CB Franchising will review and advise Franchisee regarding potential locations submitted by Franchisee.
11.10 Temporary Public Safety Closure. If CB Franchising discovers or becomes aware of any aspect of the Business which, in CB Franchising's opinion, constitutes an imminent danger to the
health or safety of any person, then immediately upon CB Franchising's order, Franchisee must temporarily cease operations of the Business and remedy the dangerous condition. CB Franchising shall have no liability to Franchisee or any other person for action or failure to act with respect to a dangerous condition.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to the 2024 Franchise Disclosure Document, CB Franchising offers assistance but has limited liability regarding the location of a Chocolate Bash franchise. Specifically, Chocolate Bash will provide its criteria for locations and will review and advise franchisees on potential locations they submit. The franchisee is responsible for finding potential locations within their development area. Chocolate Bash must accept or reject the proposed location in writing within 30 days.
Once a location is accepted, the franchisee is obligated to develop, open, and operate the Chocolate Bash business at that location for the entire term of the agreement. Chocolate Bash retains the right to establish or license other businesses outside the franchisee's territory and can operate or license businesses that do not use the Chocolate Bash brand name anywhere. Chocolate Bash also retains the right to sell and license others to sell products and services in the franchisee's territory through other distribution channels, including the internet, that are not Chocolate Bash outlets.
Chocolate Bash also has the right to order a temporary closure of the business if it discovers any aspect of the business that constitutes an imminent danger to health or safety. In this case, Chocolate Bash has no liability to the franchisee for action or failure to act with respect to a dangerous condition. This means that while Chocolate Bash provides location selection assistance, the ultimate responsibility, and therefore liability, regarding the success of the location rests with the franchisee, subject to Chocolate Bash's limited obligations and rights.