In a Crave Cookies dispute, if the parties agree not to participate in mediation, what is the next step?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee and Crave Cookies Franchising agree not to participate in mediation, then the matter may proceed to a legal suit as provided below.
- (iii) Legal Proceeding.
If the mediation has not resolved the matter successfully, or mediation is waived, either Franchisee or Crave Cookies Franchising may institute a legal suit, action, or proceeding, exclusively in the city and state of Crave Cookies Franchising's then-current headquarters, against the other party to enforce this Agreement or obtain any other remedy regarding any breach of this Agreement.
The prevailing party in the suit, action, or proceeding is entitled to receive, and the non-prevailing party shall pay, in addition to all other remedies to which the prevailing party may be entitled, the costs and expenses incurred by the prevailing party in conducting the suit, action, or proceeding, including attorneys' fees and expenses and court costs, even if not recoverable by law, including, but not limited to, all fees, taxes, costs, and expenses incident to appellate and post-judgment proceedings.
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2025 FDD)
According to the 2025 Crave Cookies Franchise Disclosure Document, if both the franchisee and Crave Cookies agree to waive mediation, either party may proceed to file a legal suit, action, or proceeding. This legal action must be instituted exclusively in the city and state where Crave Cookies' headquarters is located at that time.
This means that a franchisee who has a dispute with Crave Cookies, and both parties agree to skip mediation, can immediately take legal action. However, the franchisee must file this suit in the specific jurisdiction where Crave Cookies' headquarters is located. This could create additional expenses for the franchisee, depending on their location, as they will likely need to hire local counsel and potentially travel for court appearances.
The FDD also specifies that the prevailing party in any such legal proceeding is entitled to receive costs and expenses, including attorney's fees and court costs, from the non-prevailing party. This clause could discourage franchisees from pursuing legal action unless they are confident of winning, due to the risk of having to pay Crave Cookies' legal fees in addition to their own. It is important to note that this clause does not apply to mediation, only to legal proceedings.
It is also important to note that the franchisee must initiate any legal action within two years from the date they discover the conduct or event that forms the basis of the legal action. This time limitation does not apply to claims related to non-payment, indemnity, or unauthorized use of confidential information or the Marks. Franchisees should consult with an attorney to fully understand their rights and obligations under the franchise agreement and to ensure they comply with all applicable deadlines and procedures.