What is the Crave franchisee waiving regarding claims related to the loss of the Marks?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
You expressly affirm and agree that we may sell our assets, our rights to the Marks or to the System outright to a third party; may go public; may engage in a private placement of some or all of our securities; may merge, acquire other corporations, or be acquired by another corporation; may undertake a refinancing, recapitalization, leveraged buyout or other economic or financial restructuring; and, with regard to any or all of the above sales, assignments and dispositions, you expressly and specifically waive any claims, demands or damages arising from or related to the loss of said Marks (or any variation thereof) and/or the loss of association with or identification of "CRAVE Franchising, LLC" as Franchisor. Nothing contained in this Agreement shall require us to remain in the food service business or to offer the same products and services, whether or not bearing the Marks, in the event that we exercise our right to assign our rights in this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, a franchisee expressly waives any claims, demands, or damages related to the loss of Crave's trademarks or the loss of association with "CRAVE Franchising, LLC" as the franchisor. This waiver is specifically tied to situations where Crave sells its assets, rights to the Marks, or the System to a third party. It also applies if Crave goes public, engages in a private placement of securities, merges with or is acquired by another corporation, or undertakes financial restructuring.
This waiver means that if Crave is sold or undergoes a significant change that results in the franchisee no longer being able to use the Crave trademarks, the franchisee cannot sue Crave for damages related to the loss of the brand or the association with the franchisor. This could have significant financial implications for a franchisee who has invested in building a business around the Crave brand. The franchisee bears the risk that the brand could be sold or changed in a way that negatively impacts their business, and they would have no legal recourse against Crave.
This type of waiver is not uncommon in franchising, as it allows the franchisor to have flexibility in making business decisions without the threat of lawsuits from franchisees. However, it is crucial for a prospective Crave franchisee to understand the implications of this waiver and to consider the potential risks before investing in the franchise. They should assess the likelihood of Crave being sold or undergoing significant changes and how that could impact their business. It would be prudent to seek legal counsel to fully understand the scope and implications of this waiver.
It is also important to note that this waiver does not require Crave to remain in the restaurant business or to offer the same products and services, even if they bear the Marks, if they choose to assign their rights in the Franchise Agreement. This further emphasizes the risk that the franchisee bears in the event of a change in ownership or business direction by Crave.