What is the effect of the MUDA termination on the franchisee's right to operate a Crave Cookies business?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
01 (608) 266-2801 | Securities and Franchise Registration Wisconsin Securities Commission 201 West Washington Avenue, Suite 300 Madison, WI 53703 |- (b) Payment**.** Upon execution of this MUDA, Franchisee shall pay the total Initial Franchise Fee to Crave Cookies Franchising for the first location. Each additional location listed on the MUDA can be reserved with a deposit of $5000 with balance owing at the time of lease signing, The Initial Franchise Fee and deposits are non-refundable.
2. Form of Agreement. For Store #1, Franchisee and Crave Cookies Franchising have executed the Franchise Agreement simultaneously with this MUDA. For each additional Crave Cookies franchise, Franchisee shall execute Crave Cookies Franchising's then-current standard form of franchise agreement no later than three business days after Franchisee leases or acquires a location. This MUDA does not give Franchisee the right to construct, open, or operate a Crave Cookies business, and Franchisee acknowledges that Franchisee may construct, open, and operate each Crave Cookies business only pursuant to a separate franchise agreement executed pursuant to this MUDA for each such Crave Cookies business.
3. Development Area. Franchisee shall locate the first location in the Development Area indicated on the Summary Page of this Franchise Agreement. Subsequent areas may be opened in any order so long as each Opening Deadline is met in order.
Source: Item 23 — RECEIPTS (FDD pages 47–194)
What This Means (2025 FDD)
According to Crave Cookies' 2025 Franchise Disclosure Document, the Multi-Unit Development Agreement (MUDA) termination has specific implications for a franchisee's right to operate a Crave Cookies business. The MUDA does not automatically grant the right to operate a Crave Cookies business. A separate franchise agreement is required for each location. If the MUDA is terminated due to the franchisee failing to meet the development schedule or if Crave Cookies has the right to terminate any existing franchise agreement with the franchisee, the MUDA is automatically terminated without an opportunity to cure the default.
Specifically, the MUDA is terminated automatically if the franchisee fails to satisfy the development schedule outlined in the agreement. This means the franchisee must adhere to the agreed-upon timeline for opening new Crave Cookies locations. Additionally, if Crave Cookies has grounds to terminate any other franchise agreement with the franchisee (or their affiliate) due to a default, this also triggers automatic termination of the MUDA, regardless of whether Crave Cookies actually terminates the other franchise agreement.
It's important to note that the franchisee's commitment to develop Crave Cookies businesses under the MUDA is considered an option, limiting Crave Cookies' liability. If Crave Cookies terminates the MUDA due to the franchisee's default, the franchisee will not be liable for lost future revenues or profits from unopened Crave Cookies businesses. The franchisee also has the option to terminate the MUDA at any time. However, the franchisee's right to develop additional Crave Cookies franchises after the first store is contingent on having sufficient financial and organizational capacity and being in full compliance with brand requirements at their open locations.