What is considered a 'Default' in the context of the lease agreement for a Crave Cookies franchise?

According to the 2025 Crave Cookies FDD, a 'Default' in the context of the lease agreement refers to any written notice of default given to the tenant (franchisee) by the landlord. The FDD stipulates that the landlord must provide Crave Cookies Franchising with copies of any such default notices. This allows Crave Cookies Franchising the option, but not the obligation, to cure the default if the franchisee fails to do so within 10 days after the franchisee's cure period expires. This clause is part of a rider to the lease agreement designed to protect Crave Cookies' interests in maintaining the franchise location.

This arrangement benefits both Crave Cookies and its franchisees. By receiving notice of default, Crave Cookies can step in to resolve issues and prevent lease termination, ensuring the continued operation of the franchise. For the franchisee, this provides an additional layer of support, as Crave Cookies may be able to negotiate with the landlord or provide financial assistance to cure the default. However, it's important to note that Crave Cookies is not obligated to cure the default, so the franchisee ultimately remains responsible for fulfilling the lease terms.

The FDD also outlines further rights Crave Cookies has in the event of a lease termination due to franchisee default. If the landlord terminates the lease, Crave Cookies has the option to enter into a new lease with the landlord under the same terms and conditions as the original lease. To exercise this option, Crave Cookies must notify the landlord within 15 days after receiving notice of the lease termination. This provision ensures that Crave Cookies can maintain control over the location and potentially re-franchise it or operate it themselves, minimizing disruption to the brand's presence in the market.

Furthermore, if the Franchise Agreement between Crave Cookies and the franchisee is terminated during the lease term, the franchisee is required to assign the lease to Crave Cookies upon written request. The landlord consents to this assignment, allowing Crave Cookies to take over the lease and continue operating a Crave Cookies business at that location. These measures collectively demonstrate Crave Cookies' proactive approach to managing lease agreements and mitigating risks associated with franchisee defaults, which is a fairly common practice in franchise systems to protect brand integrity and market presence.