What constitutes 'ceasing operation' of a Crave Cookies business that could lead to termination?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
is Agreement expires or is terminated, Crave Cookies Franchising may enter the Location to remove the Marks and de-identify the Location. In this event, Crave Cookies Franchising will not be charged with trespass nor be accountable or required to pay for any assets removed or altered, or for any damage caused by Crave Cookies Franchising.
14.5 Liquidated Damages. If Crave Cookies Franchising terminates this Agreement based upon Franchisee's default (or if Franchisee purports to terminate this Agreement except as permitted under Section 14.1), then within 10 days thereafter Franchisee shall pay to Crave Cookies Franchising a lump sum (as liquidated damages and not as a penalty) calculated as follows: (x) the average Royalty Fees and Marketing Fund Contributions that Franchisee owed to Crave Cookies Franchising under this Agreement for the 52-week period preceding the date on which Franchisee ceased operating the Business; multiplied by (y) the lesser of (1) 104 or (2) the number of weeks remaining in the then-current term of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2025 FDD)
According to the 2025 Crave Cookies Franchise Disclosure Document, 'ceasing operation' of the business is a key factor in determining liquidated damages if the franchise agreement is terminated due to the franchisee's default. Specifically, the liquidated damages calculation is based on the average Royalty Fees and Marketing Fund Contributions owed to Crave Cookies for the 52-week period preceding the date on which the franchisee ceased operating the business. If the franchisee operated for less than 52 weeks, the calculation uses the average fees and contributions during the actual period of operation.
This definition is important because it establishes a clear point of reference for calculating the financial consequences of a franchisee's default. If a franchisee stops operating the Crave Cookies business, this date triggers the calculation of liquidated damages, which the franchisee must pay to Crave Cookies Franchising within 10 days of termination. The amount is determined by multiplying the average weekly Royalty Fees and Marketing Fund Contributions by either 104 or the number of weeks remaining in the franchise term, whichever is less.
It's also important to note that these liquidated damages are in addition to other potential damages and obligations, such as amounts owed for the period up to termination, costs related to de-identifying the location, and legal fees. The FDD specifies that the franchisee must 'cease doing business under any of the Marks' upon termination. This means stopping all activities associated with the Crave Cookies brand. Franchisees should be aware of these financial implications and ensure they understand the conditions under which termination can occur and how liquidated damages are calculated.
Furthermore, upon termination, the franchisee must also notify relevant entities (telephone, internet, email, etc.) about the termination of their right to use any numbers, addresses, domain names, locators, directories, and listings associated with the Crave Cookies marks. They must authorize the transfer of these assets to Crave Cookies Franchising or a new franchisee. Crave Cookies Franchising is appointed as the attorney-in-fact to execute these transfers, which underscores the importance of fully ceasing operations and disassociating from the brand after termination.