What is the relationship between the MUDA and the separate franchise agreement required for each Chocolate Bash business after the first?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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 Chocolate Bash's 2024 Franchise Disclosure Document, a Multi-Unit Development Agreement (MUDA) and individual franchise agreements are related but distinct. The MUDA outlines the franchisee's commitment to open multiple Chocolate Bash locations according to a development schedule. Simultaneously with the MUDA, the franchisee and Chocolate Bash execute a Franchise Agreement for the first store.
For each additional Chocolate Bash location beyond the first, the franchisee must execute Chocolate Bash's current standard franchise agreement. This must occur no later than three business days after the franchisee secures a location by lease or acquisition. The MUDA itself does not grant the franchisee the right to open or operate a Chocolate Bash business.
The right to operate each Chocolate Bash business is granted only through a separate franchise agreement executed specifically for that location, as per the MUDA. Therefore, while the MUDA sets the stage for multi-unit development, each Chocolate Bash store requires its own franchise agreement to be legally established and operated.