Can a Crave Cookies franchisee terminate the Multi-Unit Development Agreement, and if so, is there a penalty?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
You do not have the right to establish additional franchised outlets unless you sign a Multi-Unit Development Agreement ("MUDA") in the form attached as Exhibit C to this disclosure document. If you and we sign a MUDA, then you will have the exclusive right (unless stated otherwise) to establish a mutually-agreed number of additional outlets on a mutually-agreed schedule in a mutually-agreed territory. Under the MUDA, your right to develop additional outlets is subject to (1) you must comply with the mutually-agreed development schedule, (2) you must have sufficient financial and organizational capacity to develop, open, operate, and manage each additional Crave Cookies business, (3) you must be in compliance with all brand requirements at your open Crave Cookies business(es), and (4) you must not be in default under any other agreement with us. We will approve the location of future sites and territories for those sites, and our then-current standards for sites and territories will apply. You are not obligated to develop additional outlets under the MUDA, and you may terminate it any time without penalty. If you do not meet your development schedule in the MUDA, we have the right to terminate your right to develop additional outlets.
Source: Item 12 — TERRITORY (FDD pages 29–31)
What This Means (2025 FDD)
According to Crave Cookies's 2025 Franchise Disclosure Document, a franchisee who signs a Multi-Unit Development Agreement (MUDA) has the option to terminate it at any time without incurring a penalty. This agreement allows franchisees the exclusive right to establish a mutually agreed-upon number of additional Crave Cookies outlets within a mutually agreed-upon territory, following a mutually agreed-upon schedule.
This flexibility benefits franchisees as it allows them to adjust their expansion plans based on their financial situation, organizational capacity, and compliance with Crave Cookies' brand requirements. If a franchisee finds that they cannot meet the development schedule or decides to focus on their existing Crave Cookies business, they can terminate the MUDA without penalty.
However, it's important to note that if a franchisee fails to meet the development schedule outlined in the MUDA, Crave Cookies has the right to terminate the franchisee's right to develop additional outlets. This provision protects Crave Cookies' interests by ensuring that development plans are executed as agreed upon. While the franchisee can terminate the MUDA without penalty, Crave Cookies retains the right to terminate the development rights if the franchisee does not adhere to the agreed-upon schedule.