If Crave Cookies Franchising cures a default, does it have any liability to the franchisee?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
- 11.3 Crave Cookies Franchising's Right to Cure. If Franchisee breaches or defaults under any provision of this Agreement, Crave Cookies Franchising may (but has no obligation to) take any action to cure the default on behalf of Franchisee, without any liability to Franchisee.
Franchisee shall reimburse Crave Cookies Franchising for its costs and expenses (including the allocation of any internal costs) for such action, plus 10% as an administrative fee.
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies's 2025 Franchise Disclosure Document, if a franchisee breaches the Franchise Agreement, Crave Cookies Franchising has the option to cure the default on behalf of the franchisee. If Crave Cookies Franchising chooses to do so, it assumes no liability to the franchisee for taking such action.
However, the franchisee is responsible for reimbursing Crave Cookies Franchising for all costs and expenses incurred during the cure, including internal costs, plus an additional 10% administrative fee. This means that while Crave Cookies may step in to resolve a franchisee's default, the franchisee ultimately bears the financial burden of the cure.
This clause protects Crave Cookies Franchising from potential lawsuits or claims arising from their actions to correct a franchisee's default. It also incentivizes franchisees to avoid defaults, as they will be responsible for covering all associated costs and an additional administrative fee if Crave Cookies Franchising intervenes.