If Crave modifies or discontinues use of any 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. 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, franchisees expressly waive any claims, demands, or damages if Crave sells its assets, rights to the Marks, or the System to a third party. This waiver specifically includes issues 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. This means a franchisee cannot sue Crave for losses associated with changes to the brand or trademarks if Crave is sold or undergoes restructuring.
This clause protects Crave in the event of a sale, merger, or other financial restructuring. It allows Crave to make these business decisions without the threat of litigation from franchisees who might feel they have suffered damages as a result of changes to the brand or its marks.
This is a significant point for potential franchisees to consider. It means that the value of the franchise is somewhat tied to the continued presence and branding of "CRAVE Franchising, LLC". If the company is sold and the new owners change the brand, franchisees have no recourse to recover losses they may incur as a result. This type of clause is not uncommon in franchising, as it allows franchisors flexibility in business dealings, but it does shift some of the risk onto the franchisee.