Does a standard Chocolate Bash franchisee agreement grant the right to establish additional franchised outlets?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
You do not have the right to establish additional franchised outlets unless you sign a Multi-Unit Development Agreement ("MUDA") in the form attached as Exhibit C to this disclosure document. If you and we sign a MUDA, then you will have the right establish a mutually-agreed number of additional outlets. Under the MUDA, your right to develop additional outlets is subject to (1) you must comply with the mutually-agreed development schedule, (2) you must have
sufficient financial and organizational capacity to develop, open, operate, and manage each additional Chocolate Bash business, (3) you must be in compliance with all brand requirements at your open Chocolate Bash business(es), and (4) you must not be in default under any other agreement with us. We will approve the location of future sites and territories for those sites, and our then-current standards for sites and territories will apply.
Options to Acquire Additional Franchises
Source: Item 12 — TERRITORY (FDD pages 25–26)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, a standard franchise agreement does not grant the right to establish additional franchised outlets. To obtain the right to open multiple units, a franchisee must sign a Multi-Unit Development Agreement (MUDA).
Under the MUDA, the right to develop additional Chocolate Bash outlets is contingent upon several factors. The franchisee must adhere to a mutually agreed-upon development schedule and possess the financial and organizational capacity to successfully develop, open, operate, and manage each additional Chocolate Bash business. Furthermore, the franchisee must maintain compliance with all brand requirements at their existing Chocolate Bash businesses and avoid defaulting on any agreements with Chocolate Bash.
Chocolate Bash retains approval rights over the location of future sites and territories for those sites, ensuring that their then-current standards for sites and territories are met. The MUDA itself does not give the franchisee the right to construct, open, or operate a Chocolate Bash business; a separate franchise agreement must be executed for each additional Chocolate Bash business.