When is the total Initial Franchise Fee for a Chocolate Bash franchise due under the MUDA?
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 Chocolate Bash's 2024 Franchise Disclosure Document, the total Initial Franchise Fee is due upon the execution of the Multi-Unit Development Agreement (MUDA). Specifically, the FDD states that the franchisee "shall pay the total Initial Franchise Fee to CB Franchising" at this time. This fee is non-refundable.
For the first store, the Franchise Agreement is executed simultaneously with the MUDA. However, for each additional Chocolate Bash franchise, the franchisee must execute the then-current standard form of the franchise agreement no later than three business days after leasing or acquiring a location. The MUDA itself does not grant the franchisee the right to open or operate a Chocolate Bash business; this right is only granted through a separate franchise agreement for each location.
This means that a prospective franchisee needs to be prepared to pay the entire initial franchise fee upfront when signing the MUDA, even before securing locations for all the franchises they intend to develop. Given that the fee is non-refundable, franchisees should carefully consider their development plans and financial capabilities before entering into a MUDA with Chocolate Bash.