Does Crab N Spice provide 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. Franchisee's right to develop each Crab N Spice | |
| franchise after the Store #1 | ||
| is subject to the following: | ||
| (i) | Franchisee must possess sufficient financial and organizational capacity to develop, | |
| open, operate, and manage each additional Crab N Spice | ||
| business, in the reasonable | ||
| judgment of CNS Franchising, and | ||
| (ii) | Franchisee must be in full compliance with all brand requirements at its open Crab | |
| N Spice | ||
| businesses, and not in default under any Franchise Agreement or any other | ||
| agreement with CNS Franchising. | ||
| 7. purchasers | Dispute Resolution; Miscellaneous. The laws of the State of California (without giving effect to its principles of conflicts of law) govern all adversarial proceedings between the parties. The parties agree that any California law for the protection of franchisees or business opportunity will not apply unless its jurisdictional requirements are met independently without reference to this Section 7. Franchisee shall not Transfer this MUDA without the prior written consent of CNS Franchising, and any Transfer without CNS Franchising's prior written consent shall be void. The provisions of Article 17 (Dispute Resolution) and Article 18 (Miscellaneous) of the Franchise Agreement apply to and are incorporated into this MUDA as if fully set forth herein. |
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 is designed for franchisees who want to develop multiple Crab N Spice businesses within a specific area.
The MUDA requires the franchisee to adhere to a development schedule for opening 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 the Franchise Agreement simultaneously with the MUDA. For each additional Crab N Spice franchise, the franchisee must execute CNS Franchising's then-current standard form of franchise agreement no later than three business days after leasing or acquiring a location.
The franchisee must locate each Crab N Spice business within a defined Development Area and will have exclusive rights to develop, open, or operate Crab N Spice businesses in that area while the agreement is effective. 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 if the MUDA is terminated due to the franchisee's default, the franchisee is not liable for lost future revenues or profits from unopened Crab N Spice businesses. The franchisee can terminate the MUDA at any time.
The right to develop each Crab N Spice franchise after the first store is conditional upon the franchisee possessing sufficient financial and organizational capacity, in CNS Franchising's judgment, and being in full compliance with brand requirements at its open Crab N Spice businesses, without any default under any Franchise Agreement or other agreement with CNS Franchising. The laws of California govern adversarial proceedings, and the franchisee cannot transfer the MUDA without CNS Franchising's prior written consent.