If Crave modifies or discontinues a Mark, can a Crave franchisee commence litigation against Crave for expenses, losses, or damages?
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.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, Crave franchisees expressly waive their right to make claims, demands, or seek damages related to the loss of the Marks 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 private placement of securities, merges with or is acquired by another corporation, or undertakes financial restructuring.
This means that if Crave decides to modify or discontinue a Mark as part of a larger business transaction like a sale or merger, franchisees cannot sue Crave for any financial losses they might experience as a result. This is a significant point for potential franchisees to consider, as it limits their legal recourse in situations where Crave's decisions about its branding impact their business.
This type of waiver is not uncommon in franchise agreements, as franchisors often want to maintain flexibility in making business decisions without the threat of litigation from franchisees. However, it's crucial for franchisees to understand the scope of such waivers and how they might affect their investment. Prospective Crave franchisees should seek legal counsel to fully understand the implications of this waiver before signing the franchise agreement.