Is a Crave Cookies franchisee's obligation to pay fees dependent on Crave Cookies Franchising's performance?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
(g) Obligations Independent; No Set-Off. The obligations of Franchisee to pay to Crave Cookies Franchising any fees or amounts described in this Agreement are not dependent on Crave Cookies Franchising's performance and are independent covenants by Franchisee. Franchisee shall make all such payments without offset or deduction.
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies's 2025 Franchise Disclosure Document, a franchisee's obligation to pay fees is not dependent on Crave Cookies Franchising's performance. The franchise agreement specifies that the franchisee's payment obligations are independent covenants. This means that the franchisee must make all required payments without any deductions or offsets, regardless of whether they believe Crave Cookies Franchising is fulfilling its obligations under the agreement.
This clause is significant for prospective franchisees as it emphasizes the unconditional nature of their financial commitments. Even if a franchisee experiences dissatisfaction with the level of support or services provided by Crave Cookies Franchising, they are still legally bound to pay all fees as outlined in the franchise agreement. Failure to do so could result in penalties, legal action, and potential termination of the franchise agreement.
Such stipulations are relatively standard in franchise agreements across various industries. Franchisors often include similar clauses to ensure a consistent revenue stream, which is essential for maintaining the franchise system and providing services to all franchisees. However, it's crucial for franchisees to understand that this arrangement places the financial risk squarely on their shoulders, requiring them to fulfill their payment obligations even during periods of disagreement or perceived underperformance by the franchisor.
Therefore, before signing the franchise agreement, prospective Crave Cookies franchisees should carefully consider this clause and seek legal counsel to fully understand its implications. They should also conduct thorough due diligence to assess the franchisor's track record and reputation for providing adequate support and fulfilling its contractual obligations. This will help them make an informed decision and mitigate the risks associated with this independent covenant.