Under what circumstances is the Crave franchise agreement deemed amended regarding termination rights?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
ADDENDUM REQUIRED BY THE COMMONWEALTH OF VIRGINIA
In recognition of the restrictions contained in Section 13.1-564 of the Virginia Retail Franchising Act, the Franchise Disclosure Document for CRAVE Franchising, LLC for use in the Commonwealth of Virginia shall be amended as follows:
- Additional Disclosure: The following statements are added to Item 17.h:
Pursuant to Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to cancel a franchise without reasonable cause. If any grounds for default or termination stated in the franchise agreement and development agreement does not constitute "reasonable cause," as that term may be defined in the Virginia Retail Franchising Act or the laws of Virginia, the provision may not be enforceable.
ADDENDUM TO THE FRANCHISE AGREEMENT REQUIRED BY THE STATE OF MARYLAND
This will serve as the State Addendum for the State of Maryland for CRAVE Franchising, LLC's Franchise Agreement. The amendments to the Franchise Agreement included in this addendum have been agreed to by the parties.
The provisions in the Franchise Agreement which provide for termination upon bankruptcy of the franchisee may not be enforceable under federal bankruptcy law (11 U.S.C.
Section 101 et seq.).
RECITALS
WHEREAS, Franchisor and Franchisee are parties to a franchise agreement of even date herewith which grants Franchisee the rights to establish a Crave® franchise in accordance with said agreement (the "Franchise Agreement");
WHEREAS, Franchisee elects, with Franchisor's consent, to operate Franchisee's Franchised Business at and from a food truck ("Food Truck"); and
WHEREAS, Franchisor and Franchisee desire to amend the Franchise Agreement as set forth herein.
NOW, THEREFORE, in consideration of the mutual promises contained in the Franchise Agreement and this Addendum, and for good and valuable considerations in hand paid by each of the parties to the others, the receipt and sufficiency of which the parties acknowledge, the parties agree as follows:
- Sections 1.2 (Accepted Location) and 1.4 (Designated Territory) of the Franchise Agreement are hereby amended to state there shall be no Accepted Location for the Franchised Business. Section 1.4 (Designated Territory) is further amended by deleting the first paragraph thereof and replacing it with the following:
"Upon the execution of this Agreement, you shall be assigned a territory (the "Designated Territory") that will also be described in Exhibit A of the Addendum. You understand and acknowledge that if your Designated Territory includes a Non-Traditional Site (as described in Section 1.5 of the Franchise Agreement), the Non-Traditional Site is not a part of your Designated Territory and you shall have no right to operate the Food Truck at any Non-Traditional Site without our prior written permission."
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to the 2025 Crave Franchise Disclosure Document, the franchise agreement can be amended by addenda required by certain states. For example, the addendum required by the Commonwealth of Virginia recognizes restrictions in the Virginia Retail Franchising Act, stating that it is unlawful for Crave to cancel a franchise without reasonable cause. If any grounds for default or termination stated in the franchise agreement and development agreement does not constitute "reasonable cause" as defined by Virginia law, the provision may not be enforceable. This amendment ensures that Crave's termination rights align with Virginia law, providing franchisees in Virginia with additional protection against unwarranted termination.
Similarly, the addendum required by the state of Maryland amends the franchise agreement regarding termination upon bankruptcy, stating that the provisions in the Franchise Agreement which provide for termination upon bankruptcy of the franchisee may not be enforceable under federal bankruptcy law. This ensures compliance with federal law and protects franchisees from termination solely due to bankruptcy, offering a more secure business environment. The Maryland addendum also includes amendments related to lawsuits, claims, and releases under the Maryland Franchise Registration and Disclosure Law, further tailoring the franchise agreement to comply with Maryland's specific legal requirements.
Furthermore, Crave may amend the Franchise Agreement through addenda when franchisees elect to operate from a food truck. In this case, sections related to the accepted location and designated territory are amended to reflect the mobile nature of the business. Specifically, there will be no accepted location, and the designated territory may exclude non-traditional sites unless prior written permission is obtained. This amendment acknowledges the unique operational characteristics of a food truck franchise and adjusts the agreement accordingly.