If a Crave franchisee seeks termination, what recourse do they have?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
| d. | Termination by franchisee | Not applicable | You may seek termination upon any grounds available by state law. | i. | Franchisee's obligations on termination/non-renewal | Section 18 | Obligations include: You must stop operating the Franchised Business and using the Marks and System and completely de-identify the business, pay all amounts due to us or our affiliates, return the Manual and all other proprietary materials, comply with confidentiality requirements, pay liquidated damages (if applicable), and at our option, sell or assign to us your rights in the Franchised Business' premises and the equipment and fixtures used in the business | | h. | "Cause" defined – non curable defaults | Sections 17.1.2 and 17.1.3 | We may terminate you for cause if you fail to cure certain defaults, including: loss of your beer and wine license, if you become insolvent, make a general assignment for benefit of creditors, file a petition or have a petition initiated against you under federal bankruptcy laws, have outstanding judgments against you for over 30 days, sell unauthorized |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 50–56)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, a franchisee may seek termination upon any grounds available by state law. This means that the specific legal options for a Crave franchisee who wishes to terminate their agreement are determined by the laws of the state in which they operate their franchise. These laws can vary significantly from state to state, so it's essential for franchisees to understand their local regulations.
It is important to note that while a franchisee may have grounds for termination under state law, the Franchise Agreement itself also outlines obligations upon termination. These include stopping operation of the Franchised Business, ceasing use of Crave's Marks and System, de-identifying the business, paying all amounts due to Crave, returning the Manual and proprietary materials, complying with confidentiality requirements, and potentially paying liquidated damages. Additionally, Crave has the option to purchase the franchisee's rights in the Franchised Business' premises and equipment.
Prospective Crave franchisees should consult with a legal professional to fully understand their rights and obligations regarding termination under both the Franchise Agreement and applicable state laws. This will help them make informed decisions and navigate the termination process effectively. Understanding the conditions under which Crave can terminate the agreement is also crucial, as a default under one agreement with Crave may result in the termination of all agreements, due to a cross-default provision.