What happens if a Crab N Spice franchisee loses possession of the location?
Crab_N_Spice Franchise · 2024 FDDAnswer from 2024 FDD Document
(v) Franchisee loses possession of the Location;
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 Crab N Spice's 2024 Franchise Disclosure Document, if a franchisee loses possession of their location, it constitutes a cause for termination of the Franchise Agreement. Upon termination of the agreement, several obligations are triggered for the franchisee.
The franchisee must immediately pay all outstanding amounts owed to Crab N Spice related to the business's operation up to the termination date. They are also required to return all copies of the Manual, Confidential Information, and any other materials provided by Crab N Spice, including items containing trademarks and copyrights. This includes deleting all confidential and proprietary materials from electronic devices.
Additionally, the franchisee must notify all relevant entities, such as telephone, internet, email, and directory services, about the termination of their right to use any numbers, addresses, domain names, or listings associated with Crab N Spice's trademarks. They must authorize the transfer of these assets to Crab N Spice or a new franchisee. The franchisee also has 30 days to de-identify the location, removing all Crab N Spice marks, signage, and trade dress to Crab N Spice's satisfaction. If the franchisee fails to do so, Crab N Spice has the right to enter the location and remove the marks and de-identify the location without being held liable for trespass or damages.