What specific claims does the franchisee waive regarding the loss of Crave's marks or 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 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 related to the loss of Crave's marks or association with Crave Franchising, LLC, under specific circumstances. This waiver is tied to potential corporate actions that Crave may undertake. These actions include selling assets, rights to the marks, or the system to a third party, going public, engaging in private placements of securities, merging with or being acquired by another corporation, or undergoing financial restructuring like refinancing or leveraged buyouts.
This waiver means that if Crave undergoes any of these corporate changes, franchisees cannot sue or claim damages based on the loss of the Crave brand identity or their association with Crave Franchising, LLC. This is a significant point for prospective franchisees to consider, as it limits their legal recourse in the event of a major change in the company's structure or ownership. The FDD also states that Crave is not required to remain in the food service business or offer the same products and services if they assign their rights in the agreement.
This type of waiver is not uncommon in franchise agreements, as it provides the franchisor with flexibility in managing and potentially exiting the business. However, it places a degree of risk on the franchisee, who invests in a brand and system that could change significantly or disappear altogether. Prospective franchisees should carefully evaluate their comfort level with this risk and consider seeking legal advice to fully understand the implications of this waiver.
It is important for potential Crave franchisees to understand that this waiver does not apply to claims arising from representations made by Crave in the Franchise Disclosure Document itself. This means that franchisees retain the right to pursue claims related to misrepresentations or omissions in the FDD. However, the waiver regarding the loss of marks and association with the franchisor is a significant limitation on their ability to seek damages in certain scenarios.