Does the Chocolate Bash MUDA require the franchisee to open a minimum number of locations?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
1. Multi-Unit Commitment.
(a) Development Schedule; Fee. Franchisee shall develop and open Chocolate Bash businesses on the following schedule:
- (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.
- 4. Default and Termination. CB Franchising may terminate this MUDA by giving notice to Franchisee, without opportunity to cure, if any of the following occur:
- (i) Franchisee fails to satisfy the development schedule; or
- 6. Conditions. Franchisee's right to develop each Chocolate Bash franchise after the Store #1 is subject to the following:
- (i) Franchisee must possess sufficient financial and organizational capacity to develop, open, operate, and manage each additional Chocolate Bash business, in the reasonable judgment of CB Franchising, and
- (ii) Franchisee must be in full compliance with all brand requirements at its open Chocolate Bash businesses, and not in default under any Franchise Agreement or any other agreement with CB Franchising.
Source: Item 23 — RECEIPTS (FDD pages 39–101)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, the Multi-Unit Development Agreement (MUDA) does require franchisees to develop and open multiple Chocolate Bash businesses according to a specific schedule. The franchisee and Chocolate Bash must agree to a development schedule. Failure to meet this schedule can result in the termination of the MUDA by Chocolate Bash.
Even with a MUDA, the right to develop each Chocolate Bash franchise after the first store is conditional. The franchisee must demonstrate sufficient financial and organizational capacity to manage each additional location. They also need to be in full compliance with all brand requirements at their existing Chocolate Bash businesses and must not be in default under any agreement with Chocolate Bash.
Prospective franchisees should carefully review the development schedule outlined in the MUDA and assess their ability to meet those obligations. They should also consider the conditions that must be met to continue developing additional Chocolate Bash locations, including financial capacity and compliance with brand standards. Note that the initial franchise fee is non-refundable.