Besides the Franchise Agreement, what other agreements are included in the Chocolate Fish Coffee disclosure document?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
2.5 Guaranty. If Franchisee is an entity, then Franchisee shall have each Owner sign a personal guaranty of Franchisee's obligations to Chocolate Fish Franchising, in the form of Attachment 3.
EXHIBIT C
MULTI-UNIT DEVELOPMENT AGREEMENT
This Multi-Unit Development Agreement (this "MUDA") is made between Chocolate Fish Franchising, LLC, a Wyoming Limited Liability Company ("Chocolate Fish Franchising") and , a ("Franchisee") on the Effective Date. Background Statement: On the same day as they execute this MUDA, Chocolate Fish Franchising and Franchisee have entered into a Franchise Agreement for the franchise of a Chocolate Fish Coffee business (the "Franchise Agreement"; capitalized terms used but not defined in this MUDA have the meanings given in the Franchise Agreement). Chocolate Fish Franchising and Franchisee desire that Franchisee develop multiple Chocolate Fish Coffee businesses.
- (v) Franchisee and each Owner executes a general release (on Chocolate Fish Franchising's then-standard form) of any and all claims against Chocolate Fish Franchising, its affiliates, and their respective owners, officers, directors, agents and employees.
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to the 2024 Chocolate Fish Coffee Franchise Disclosure Document, besides the Franchise Agreement, franchisees may also need to sign a Multi-Unit Development Agreement (MUDA), a personal guaranty, and a general release.
The Multi-Unit Development Agreement (MUDA) is used when a franchisee commits to opening multiple Chocolate Fish Coffee locations. The FDD specifies that on the same day the MUDA is executed, both Chocolate Fish Franchising and the franchisee will enter into a Franchise Agreement for the first Chocolate Fish Coffee business. The MUDA outlines the schedule for developing and opening these multiple locations.
If the franchisee is an entity, each owner must sign a personal guaranty, which is included as Attachment 3 in the FDD. This guaranty ensures that the owner(s) personally guarantee the franchisee's obligations to Chocolate Fish Coffee. The guarantor also has obligations regarding confidential information, including maintaining confidentiality during and after the franchise term and not using the information in any unauthorized manner. The guarantor also agrees to certain covenants not to compete during the term of the Franchise Agreement and for two years after the agreement expires or is terminated, within a specific radius.
Additionally, franchisees may be required to sign a general release on Chocolate Fish Coffee's standard form when renewing their franchise agreement. This release waives any claims against Chocolate Fish Coffee, its affiliates, and their respective owners, officers, directors, agents, and employees. The FDD notes specific stipulations for residents of Maryland and Washington concerning these releases.