Who is considered an 'Owner' of a Crab N Spice franchise?

According to Crab N Spice's 2024 Franchise Disclosure Document, an 'Owner' is defined as any individual or entity that directly or indirectly owns or controls any equity of the franchisee. If the franchisee is an individual person, then the franchisee themselves is considered the 'Owner'.

This definition is important because the franchisor, CNS Franchising, requires each Owner to sign a personal guaranty of the franchisee's obligations. This means that if the franchisee is a corporation or other entity, each individual or entity with an ownership stake must personally guarantee the franchisee's financial and contractual obligations to Crab N Spice. This is a common practice in franchising, as it provides the franchisor with additional security and recourse in case of default by the franchisee.

Furthermore, the identity of each owner, officer, and director of the franchisee, along with the nature and extent of each owner's interest, must be disclosed to CNS Franchising. Any changes to this information must be reported within 10 days. This allows Crab N Spice to maintain an accurate record of the ownership structure of each franchise and to ensure that all Owners are aware of their obligations under the franchise agreement. The 'Principal Executive' of the franchise must have at least 10% ownership interest in the Franchisee.