Does Crave Cookies acknowledge being subject to claims and lawsuits?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
affect of this entry as it relates to the prior year has not been evaluated.
Note 7 - Significant Estimates
The Company is subject to claims and lawsuits that arose primarily in the ordinary course of business. It is the opinion of management the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the financial position, results of operations and cash flows of the Company. Events could occur that would change this estimate materially in the near term.
Note 8 - Pending or Threatened Litigation
From time to time the Company is subject to lawsuits. The Company is prepared to rigorously defend itself against any such litigation. As of December 31, 2024, the Company did not have any ongoing or threatened litigation.
Due to periodic disagreements with franchisees, the Company enters into arbitration proceedings to resolve the various matters. As of December 31, 2024, the Company was in arbitration with a franchisee.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies's 2025 Franchise Disclosure Document, the company acknowledges being subject to claims and lawsuits that arise primarily in the ordinary course of business. However, the management of Crave Cookies believes that the resolution of these claims and lawsuits will not have a material adverse effect on the company's financial position, results of operations, and cash flows. It is important to note that this is an estimate, and events could occur that would change this estimate materially in the near term.
Additionally, the FDD states that Crave Cookies is, from time to time, subject to lawsuits and is prepared to defend itself rigorously against any such litigation. As of December 31, 2024, Crave Cookies did not have any ongoing or threatened litigation. However, the company was in arbitration with a franchisee due to periodic disagreements. While Crave Cookies believes it will receive a favorable outcome, the potential outcome has not been evaluated and is not reflected in the financial statements.
For a prospective franchisee, this indicates that legal disputes are a normal part of Crave Cookies's business operations. While the company believes these disputes will not significantly impact its financial health, the possibility of adverse outcomes always exists. It is advisable for potential franchisees to inquire about the nature and history of these claims and lawsuits during their due diligence to fully understand the potential risks involved.