Does CNS Franchising have an obligation to cure a Crab N Spice franchisee's default?
Crab_N_Spice Franchise · 2024 FDDAnswer from 2024 FDD Document
- 11.3 CNS Franchising's Right to Cure. If Franchisee breaches or defaults under any provision of this Agreement, CNS Franchising may (but has no obligation to) take any action to cure the default on behalf of Franchisee, without any liability to Franchisee.
Franchisee shall reimburse CNS Franchising for its costs and expenses (including the allocation of any internal costs) for such action, plus 10% as an administrative fee.
Source: Item 22 — CONTRACTS (FDD pages 50–51)
What This Means (2024 FDD)
According to Crab N Spice's 2024 Franchise Disclosure Document, CNS Franchising does not have an obligation to cure a franchisee's default. However, CNS Franchising has the right to take action to cure the default on behalf of the franchisee, but it is not obligated to do so.
If Crab N Spice chooses to cure a default, it can take any action it deems necessary without liability to the franchisee. The franchisee is then required to reimburse Crab N Spice for all costs and expenses incurred in curing the default, including a 10% administrative fee.
This clause in the franchise agreement protects Crab N Spice from being held liable for not curing a franchisee's default, while also allowing them the option to step in and protect the brand and system if a franchisee is in breach of the agreement. For a prospective franchisee, this means they cannot rely on Crab N Spice to fix their mistakes, but they may be required to pay Crab N Spice if the franchisor chooses to step in and resolve the issue.