What is the franchisee waiving regarding the loss of association with 'CRAVE Franchising, LLC'?
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 restaurant 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, franchisees expressly waive any claims, demands, or damages related to the loss of association with "CRAVE Franchising, LLC" as the franchisor. This waiver is specifically tied to situations where Crave might sell its assets, rights to its trademarks, or the entire 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 undergoes any form of financial restructuring such as refinancing or a leveraged buyout.
This waiver means that if Crave is acquired or undergoes significant changes, franchisees cannot sue or make claims against Crave for any perceived loss of value or goodwill stemming from the change in ownership or management. This is a significant point for prospective franchisees to consider, as it limits their legal recourse in the event of a major shift in the franchisor's business operations or identity.
The FDD also states that Crave is not obligated to remain in the food service business or offer the same products and services should they assign their rights in the Franchise Agreement. This further emphasizes the potential for substantial changes in the brand and operations, with limited protection for the franchisee. Franchisees should carefully evaluate their risk tolerance and seek legal counsel to fully understand the implications of this waiver before investing in a Crave franchise.
In essence, this clause provides Crave with considerable flexibility in its business dealings, while placing the onus on the franchisee to accept the risks associated with potential changes in the franchisor's business model or ownership. This type of waiver is not uncommon in franchising, but its specific terms and potential impact should be thoroughly understood.