Regarding liabilities, adverse claims, commitments, or obligations, what is the requirement for a Crave franchisee as of the date of execution of the Franchise Agreement?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
- BY EXECUTING THE FRANCHISE AGREEMENT, FRANCHISEE AND ANY PRINCIPAL, INDIVIDUALLY AND ON BEHALF OF FRANCHISEE'S AND SUCH PRINCIPAL'S HEIRS, LEGAL REPRESENTATIVES, SUCCESSORS AND ASSIGNS, HEREBY FOREVER RELEASE AND DISCHARGE CRAVE FRANCHISING, LLC AND ANY OF ITS PARENT COMPANY, SUBSIDIARIES, DIVISIONS, AFFILIATES, SUCCESSORS, ASSIGNS AND DESIGNEES, AS WELL AS THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, AND SHAREHOLDERS FROM ANY AND ALL CLAIMS, DEMANDS AND JUDGMENTS RELATING TO OR ARISING UNDER THE STATEMENTS, CONDUCT, CLAIMS OR ANY OTHER AGREEMENT BETWEEN THE PARTIES EXECUTED PRIOR TO THE DATE OF THE FRANCHISE AGREEMENT, INCLUDING, BUT NOT LIMITED TO, ANY AND ALL CLAIMS, WHETHER PRESENTLY KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, ARISING UNDER THE FRANCHISE, SECURITIES, TAX OR ANTITRUST LAWS OF THE UNITED STATES OR OF ANY STATE OR TERRITORY THEREOF. THIS RELEASE IS SPECIFICALLY INAPPLICABLE TO ANY CLAIMS ARISING FROM REPRESENTATIONS MADE BY FRANCHISOR IN FRANCHISOR'S FRANCHISE DISCLOSURE DOCUMENT RECEIVED BY FRANCHISEE.
Initial ACKNOWLEDGED: PRINCIPALS: Name: Date:
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, upon executing the Franchise Agreement, a franchisee agrees to release and discharge Crave Franchising, LLC from any claims, demands, and judgments related to agreements or conduct before the agreement date. This release extends to the franchisee's heirs, legal representatives, successors, and assigns, covering claims under franchise, securities, tax, or antitrust laws. However, this release does not apply to claims arising from representations made by Crave in its Franchise Disclosure Document.
In simpler terms, by signing the Franchise Agreement, the franchisee essentially waives their right to sue Crave for anything that happened or was agreed upon before the agreement was signed. This includes potential claims related to the franchise offering itself, securities laws, tax matters, or antitrust issues. This is a standard legal protection for franchisors, ensuring they aren't held liable for past issues once a new agreement is in place.
However, there's a crucial exception: the franchisee retains the right to sue Crave based on any misrepresentations made within the Franchise Disclosure Document itself. This is a critical protection for franchisees, ensuring the franchisor is accountable for the accuracy of the information provided to potential investors. Franchisees should carefully review the FDD and note any discrepancies or concerns before signing the Franchise Agreement, as this document forms the basis for any future claims against Crave regarding its disclosures.
This clause highlights the importance of thorough due diligence before signing a franchise agreement. While the franchisee gives up certain rights related to the past, they retain the ability to hold Crave accountable for the information presented in the FDD. Prospective franchisees should consult with legal and financial advisors to fully understand the implications of this release and ensure they are comfortable with the risks involved.