Does Crab N Spice offer a multi-unit development agreement?
Crab_N_Spice Franchise · 2024 FDDAnswer from 2024 FDD Document
representations or promises outside of the Disclosure Document and Franchise Agreement may not be enforceable.
WASHINGTON ADDENDUM TO DISCLOSURE DOCUMENT
(See Exhibit J for Washington Addendum to Disclosure Document and Rider to Franchise Agreement)
EXHIBIT C
MULTI-UNIT DEVELOPMENT AGREEMENT
| Franchisee | | |---|---| | Franchisee’s Address | | | Principal Executive | | | Initial Franchise Fee | $ | | Training Fee | $ | | Site Fee | $ | | Development Area | | | Opening Deadline | | Background Statement: On the same day as they execute this MUDA, CNS Franchising and Franchisee have entered into a Franchise Agreement for the franchise of a Crab N Spice business (the "Franchise Agreement"; capitalized terms used but not defined in this MUDA have the meanings given in the Franchise Agreement). CNS Franchising and Franchisee desire that Franchisee develop multiple Crab N Spice businesses.
1. Multi-Unit Commitment.
(a) Development Schedule; Fee. Franchisee shall develop and open Crab N Spice businesses on the following schedule:
| Store # | Deadline for Opening | Total # of Stores to be Open and Operating On Deadline | Initial Franchise Fee |
|---|---|---|---|
| 1 | 1 | $ | |
| 2 | 2 | $ | |
| 3 | 3 | $ | |
| 4 | 4 | $ | |
| 5 | 5 Total Initial Franchise Fee: | $ |
- (b) Payment**.** Upon execution of this MUDA, Franchisee shall pay the total Initial Franchise Fee to CNS Franchising. The Initial Franchise Fee is non-refundable.
- 2. Form of Agreement. For Store #1, Franchisee and CNS Franchising have executed the Franchise Agreement simultaneously with this MUDA. For each additional Crab N Spice franchise, Franchisee shall execute CNS Franchising's then-current standard form of franchise agreement no later than three business days after Franchisee leases or acquires a location. This MUDA does not give Franchisee the right to construct, open, or operate a Crab N Spice business, and Franchisee acknowledges that Franchisee may construct, open, and operate each Crab N Spice business only pursuant to a separate franchise agreement executed pursuant to this MUDA for each such Crab N Spice business.
MULTI-UNIT DEVELOPMENT AGREEMENT
| 3. | Development Area. Franchisee shall locate each Crab N Spice business it develops under this MUDA within the following area: (the | |
|---|---|---|
| Spice | "Development Area"). Franchisee will | |
| have exclusive rights to develop, open or operate Crab N | ||
| businesses in the Development Area | ||
| while this agreement is effective. | ||
| 4. | Default and Termination. CNS Franchising | |
| may terminate this MUDA by giving notice | ||
| to Franchisee, without opportunity to cure, if any of the following occur: | ||
| (i) | Franchisee fails to satisfy the development schedule; or | |
| (ii) | CNS Franchising | |
| has the right to terminate any franchise agreement between CNS | ||
| Franchising | ||
| and Franchisee (or any affiliate thereof) due to Franchisee's default | ||
| thereunder (whether or not CNS Franchising | ||
| actually terminates such franchise | ||
| agreement). | ||
| 5. | Limitation of Liability. Franchisee's | |
| commitment to develop Crab N Spice | ||
| businesses is | ||
| in the nature of an option only. If CNS Franchising | ||
| terminates this MUDA for Franchisee's default, | ||
| Franchisee shall not be liable to CNS Franchising | ||
| for lost future revenues or profits from the | ||
| unopened Crab N Spice | ||
| businesses. | ||
| Franchisee may terminate this MUDA at any time. | ||
| 6. | Conditions. |
Source: Item 23 — RECEIPTS (FDD pages 51–119)
What This Means (2024 FDD)
Yes, according to the 2024 Crab N Spice Franchise Disclosure Document, Crab N Spice offers a Multi-Unit Development Agreement (MUDA). The MUDA allows a franchisee to develop multiple Crab N Spice businesses within a specific development area.
The agreement requires the franchisee to adhere to a development schedule for opening new Crab N Spice locations. Upon executing the MUDA, the franchisee must pay the total initial franchise fee to CNS Franchising, which is non-refundable. For the first store, the franchisee and CNS Franchising execute a Franchise Agreement simultaneously with the MUDA. For each additional franchise, the franchisee must execute CNS Franchising's then-current standard franchise agreement within three business days of leasing or acquiring a location.
The MUDA grants the franchisee exclusive rights to develop, open, and operate Crab N Spice businesses within the designated development area while the agreement is effective. However, CNS Franchising can terminate the MUDA if the franchisee fails to meet the development schedule or if CNS Franchising has the right to terminate any franchise agreement with the franchisee due to default. The franchisee's commitment is considered an option, and they can terminate the MUDA at any time. The right to develop subsequent Crab N Spice franchises is contingent on the franchisee's financial and organizational capacity and compliance with brand requirements.