factual

Does the Crab N Spice franchise provide state addenda to the disclosure document?

Crab_N_Spice Franchise · 2024 FDD

Answer from 2024 FDD Document

te of limitation period for claims under the Act, rights or remedies under the Act such as a right to a jury trial may not be enforceable.

Transfer fees are collectable to the extent that they reflect the franchisor's reasonable estimated or actual costs in effecting a transfer.

CRAB N SPICE GROUP

Item 23 RECEIPTS

Detachable documents acknowledging your receipt of this disclosure document are attached as the last two pages of this disclosure document.

STATE ADDENDA TO DISCLOSURE DOCUMENT

CALIFORNIA ADDENDUM TO DISCLOSURE DOCUMENT

California Corporations Code, Section 31125 requires the franchisor to give the franchisee a disclosure document, approved by the Department Of Financial Protection and Innovation, prior to a solicitation of a proposed material modification of an existing franchise.

No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.

THE CALIFORNIA FRANCHISE INVESTMENT LAW REQUIRES THAT A COPY OF ALL PROPOSED AGREEMENTS RELATING TO THE SALE OF THE FRANCHISE BE DELIVERED TOGETHER WITH THE OFFERING CIRCULAR.

OUR WEBSITE HAS NOT BEEN REVIEWED OR APPROVED BY THE CALIFORNIA DEPARTMENT OF FINANCIAL PROTECTION AND INNOVATION. ANY COMPLAINTS CONCERNING THE CONTENT OF THIS WEBSITE MAY BE DIRECTED TO THE CALIFORNIA DEPARTMENT OF FINANCIAL PROTECTION AND INNOVATION AT www.dfpi.ca.gov.

THESE FRANCHISES HAVE BEEN REGISTERED UNDER THE FRANCHISE INVESTMENT LAW OF THE STATE OF CALIFORNIA. SUCH REGISTRATION DOES NOT CONSTITUTE APPROVAL, RECOMMENDATION OR ENDORSEMENT BY THE COMMISSIONER OF BUSINESS OVERSIGHT NOR A FINDING BY THE COMMISSIONER THAT THE INFORMATION PROVIDED HEREIN IS TRUE, COMPLETE AND NOT MISLEADING.

ALL THE OWNERS OF THE FRANCHISE WILL BE REQUIRED TO EXECUTE PERSONAL GUARANTEES. THIS REQUIREMENT PLACES THE MARITAL ASSETS OF THE SPOUSES DOMICILED IN COMMUNITY PROPERTY STATES – ARIZONA, CALIFORNIA, IDAHO, LOUISIANA, NEVADA, NEW MEXICO, TEXAS, WASHINGTON AND WISCONSIN AT risk IF YOUR FRANCHISE FAILS.

The Franchisee must comply with the requirements set forth in the Alcoholic Beverage Control Act and the California code of Regulations, Title 4 for the sale of alcoholic beverages.

The State of California has codified regulations specific to the food service industry which may be applicable to you. You may refer to the California Plan Check Guide for Retail Food Facilities at www.ccdeh.com/resoureces/documents/food-safety-guidelines-1/152-californiaplan-check-guide-for-retail-food-facilities-2/file. For further requirements, please see the California Retail Food Code at www.cdph.ca.gov/services/Documents/fdbRFC.pdf.

  1. The following paragraph is added to the end of Item 3 of the Disclosure Document:

Neither franchisor nor any person or franchise broker in Item 2 of this disclosure document is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities Exchange Act of 1934, 15 U.S.C.A. 78a et seq., suspending or expelling such persons from membership in that association or exchange.

  1. The following is added to Item 5 of the Disclosure Document:

All fees are deferred until Franchisor has delivered all pre-opening obligations and Franchisee is open for business.

  1. The following paragraph is added to the end of Item 6 of the Disclosure Document:

With respect to the Late Fee described in Item 6, this Item is amended to disclose that the maximum rate of interest permitted under California law is 10%.

  1. The following paragraphs are added at the end of Item 17 of the Disclosure Document:

You must sign a general release if you renew or transfer your franchise. California Corporations Code 31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code 31000 through 31516). Business and Professions Code 20010 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code 20000 through 20043).

California Business and Professions Code Sections 20000 through 20043 provide rights to the franchisee concerning termination, transfer, or non-renewal of a franchise. If the Franchise Agreement contains a provision that is inconsistent with the law, the law will control.

The Franchise Agreement provides for termination upon bankruptcy.

Source: Item 23 — RECEIPTS (FDD pages 51–119)

What This Means (2024 FDD)

Yes, according to the 2024 Crab N Spice Franchise Disclosure Document, the document includes state-specific addenda. Specifically, the FDD includes addenda for California and Minnesota.

The California addendum includes information regarding the California Corporations Code, specifically Section 31125, which requires the franchisor to provide a disclosure document approved by the Department Of Financial Protection and Innovation before any proposed material modification of an existing franchise. It also states that no statement can waive claims under state franchise law or disclaim reliance on statements made by the franchisor. The addendum also mentions that all proposed agreements relating to the sale of the franchise must be delivered with the offering circular and includes a disclaimer about the website not being reviewed or approved by the California Department of Financial Protection and Innovation. Furthermore, it highlights that all owners will be required to execute personal guarantees, potentially placing marital assets in community property states at risk.

The Minnesota addendum outlines specific amendments to the disclosure document for franchisees in Minnesota, referencing Minnesota Statutes, Section 80C.21 and Minnesota Rules 2860.4400(J), which prohibit the franchisor from requiring litigation outside Minnesota, waiver of a jury trial, or consent to liquidated damages. It also addresses termination and non-renewal notice periods, franchisee's rights to trademarks, and prohibitions against requiring a franchisee to assent to a general release or consent to the franchisor obtaining injunctive relief.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.