Does the MUDA itself grant the right to open or operate a Chocolate Bash business?
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 23 — RECEIPTS (FDD pages 39–101)
What This Means (2024 FDD)
According to the 2024 Chocolate Bash Franchise Disclosure Document, the Multi-Unit Development Agreement (MUDA) does not, by itself, grant the right to open or operate a Chocolate Bash business. The FDD states that a separate franchise agreement is required for each Chocolate Bash location.
Specifically, while the MUDA outlines the schedule for developing multiple Chocolate Bash businesses, it explicitly states that the franchisee must execute Chocolate Bash's current standard franchise agreement for each additional location no later than three business days after securing the location. This agreement is separate from the MUDA.
Therefore, a prospective franchisee should understand that entering into a MUDA with Chocolate Bash commits them to a development schedule and requires them to pay the total Initial Franchise Fee upon execution of the MUDA. However, each individual Chocolate Bash store can only be opened and operated under a separate, subsequently signed franchise agreement. The MUDA simply sets the stage for future franchise agreements, it does not replace the need for them.