What is the effect of termination on the obligations of the Crab N Spice franchisee?
Crab_N_Spice Franchise · 2024 FDDAnswer from 2024 FDD Document
14.3 Effect of Termination. Upon termination or expiration of this Agreement, all obligations that by their terms or by reasonable implication survive termination, including those pertaining to non-competition, confidentiality, indemnity, and dispute resolution, will remain in effect, and Franchisee must immediately:
(i) pay all amounts owed to CNS Franchising based on the operation of the Business through the effective date of termination or expiration;
(ii) return to CNS Franchising all copies of the Manual, Confidential Information and any and all other materials provided by CNS Franchising to Franchisee or created by a third party for Franchisee relating to the operation of the Business, and all
items containing any Marks, copyrights, and other proprietary items; and delete all Confidential Information and proprietary materials from electronic devices;
(iii) notify the telephone, internet, email, electronic network, directory, and listing entities of the termination or expiration of Franchisee's right to use any numbers, addresses, domain names, locators, directories and listings associated with any of the Marks, and authorize their transfer to CNS Franchising or any new franchisee as may be directed by CNS Franchising, and Franchisee hereby irrevocably appoints CNS Franchising, with full power of substitution, as its true and lawful attorney-in-fact, which appointment is coupled with an interest; to execute such directions and authorizations as may be necessary or appropriate to accomplish the foregoing; and
(iv) cease doing business under any of the Marks.
14.4 Remove Identification. Within 30 days after termination or expiration, Franchisee shall at its own expense "de-identify" the Location so that it no longer contains the Marks, signage, or any trade dress of a Crab N Spice business, to the reasonable satisfaction of CNS Franchising.
Franchisee shall comply with any reasonable instructions and procedures of CNS Franchising for de-identification.
If Franchisee fails to do so within 30 days after this Agreement expires or is terminated, CNS Franchising may enter the Location to remove the Marks and de-identify the Location.
In this event, CNS Franchising will not be charged with trespass nor be accountable or required to pay for any assets removed or altered, or for any damage caused by CNS Franchising.
Source: Item 22 — CONTRACTS (FDD pages 50–51)
What This Means (2024 FDD)
According to the 2024 Crab N Spice Franchise Disclosure Document, upon termination or expiration of the Franchise Agreement, several obligations of the franchisee continue. These include obligations related to non-competition, confidentiality, indemnity, and dispute resolution, which remain in effect. The franchisee must also pay all outstanding amounts owed to Crab N Spice based on the business's operation up to the termination date.
Additionally, the franchisee is required to return all copies of the operations manual, confidential information, and any materials provided by Crab N Spice or created for the franchisee related to the business. This includes items containing trademarks, copyrights, and other proprietary items, and all confidential and proprietary materials must be deleted from electronic devices. The franchisee must also notify relevant entities such as telephone, internet, email, and directory services of the termination of their right to use any numbers, addresses, domain names, directories, and listings associated with Crab N Spice's trademarks, authorizing their transfer to Crab N Spice or a new franchisee.
Furthermore, the franchisee must cease doing business under any of Crab N Spice's trademarks. Within 30 days after termination or expiration, the franchisee is responsible for de-identifying the location at their own expense, removing all trademarks, signage, and trade dress associated with Crab N Spice to the franchisor's reasonable satisfaction. If the franchisee fails to do so within this period, Crab N Spice has the right to enter the location to remove the trademarks and de-identify the location without being held liable for trespass or any damages caused during the process.