What are the obligations of a Chocolate Bash franchisee upon termination or non-renewal of the franchise agreement?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in franchise | Summary |
|---|---|---|
| i. Franchisee’s obligations | Pay all amounts due; return Manual and | |
| on termination/non- | ||
| renewal | proprietary items; notify phone, internet, and other providers and transfer service; cease doing business; remove identification; purchase option by us. | |
| r. Non-competition | For two years, no ownership or employment by | |
| covenants after the | ||
| franchise is terminated or | ||
| expires FA: § 13.2 | a competitor located within five miles of your former territory or the territory of any other Chocolate Bash business operating on the date of termination. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 30–34)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, Item 17 outlines the franchisee's obligations upon termination or non-renewal. These obligations include paying all amounts due to the franchisor. Additionally, the franchisee must return the operations manual and any other proprietary items to Chocolate Bash. The franchisee is also required to notify and transfer service from phone, internet, and other providers.
Upon termination or non-renewal, the franchisee must cease conducting business as a Chocolate Bash franchise. This includes removing all Chocolate Bash identification and branding from the premises. It is important to note that Chocolate Bash retains a purchase option, meaning they may have the option to purchase the franchisee's business.
Furthermore, for a period of two years after termination or expiration, the franchisee is subject to a non-competition covenant. This prevents the franchisee (or any owner/spouse of owner) from having ownership or employment by a competitor located within five miles of the former Chocolate Bash territory or the territory of any other Chocolate Bash business operating on the date of termination. This restriction could significantly limit business opportunities in the immediate area after leaving the franchise system.