Does Crab N Spice have any pending actions against them alleging unfair or deceptive practices?
Crab_N_Spice Franchise · 2024 FDDAnswer from 2024 FDD Document
Except as provided above, with regard to the franchisor, its predecessor, a person identified in Item 2, or an affiliate offering franchises under the franchisor's principal trademark:
- A. No such party has an administrative, criminal or civil action pending against that person alleging: a felony, a violation of a franchise, antitrust, or securities law, fraud, embezzlement, fraudulent conversion, misappropriation of property, unfair or deceptive practices, or comparable civil or misdemeanor allegations.
- B. No such party has pending actions, other than routine litigation incidental to the business, which are significant in the context of the number of franchisees and the size, nature or financial condition of the franchise system or its business operations.
- C. No such party has been convicted of a felony or pleaded nolo contendere to a felony charge or, within the 10-year period immediately preceding the application for registration, has been convicted of or pleaded nolo contendere to a misdemeanor charge or has been the subject of a civil action alleging: violation of a franchise, antifraud, or securities law; fraud; embezzlement; fraudulent conversion or misappropriation of property; or unfair or deceptive practices or comparable allegations.
- D. No such party is subject to a currently effective injunctive or restrictive order or decree relating to the franchise, or under a Federal, State, or Canadian franchise, securities, antitrust, trade regulation or trade practice law, resulting from a concluded or pending action or proceeding brought by a public agency; or is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities and Exchange Act of 1934, suspending or expelling such person from membership in such association or exchange; or is subject to a currently effective injunctive or restrictive order relating to any other business activity as a result of an action brought by a public agency or department, including, without limitation, actions affecting a license as a real estate broker or sales agent.
Source: Item 23 — RECEIPTS (FDD pages 51–119)
What This Means (2024 FDD)
According to Crab N Spice's 2024 Franchise Disclosure Document, there are specific disclosures regarding pending actions against the franchisor. The FDD states that no party (including the franchisor, its predecessors, individuals identified in Item 2, or affiliates offering franchises under the franchisor's principal trademark) has any administrative, criminal, or civil actions pending against them alleging a felony, violation of franchise, antitrust, or securities law, fraud, embezzlement, fraudulent conversion, misappropriation of property, unfair or deceptive practices, or comparable allegations.
Furthermore, Crab N Spice states that there are no pending actions, other than routine litigation incidental to the business, which are significant in the context of the number of franchisees and the size, nature, or financial condition of the franchise system or its business operations. This indicates that while routine lawsuits may occur, none are considered significant enough to warrant concern given the scale of the franchise.
Additionally, the disclosure confirms that no party has been convicted of a felony or pleaded nolo contendere to a felony charge, or within the 10-year period preceding the application for registration, been convicted of or pleaded nolo contendere to a misdemeanor charge, or been the subject of a civil action alleging violations of franchise, antifraud, or securities law; fraud; embezzlement; fraudulent conversion or misappropriation of property; or unfair or deceptive practices or comparable allegations. This provides assurance that the company and its key personnel have a clean legal record in these areas over the past decade.
Finally, Crab N Spice states that no party is subject to a currently effective injunctive or restrictive order or decree relating to the franchise, or under a Federal, State, or Canadian franchise, securities, antitrust, trade regulation, or trade practice law, resulting from a concluded or pending action or proceeding brought by a public agency. Nor are they subject to any currently effective order of any national securities association or national securities exchange, or any currently effective injunctive or restrictive order relating to any other business activity as a result of an action brought by a public agency. This indicates that Crab N Spice is not under any legal constraints that could impact its ability to operate the franchise system.