Under what circumstances does Crave Cookies have the right to terminate a franchisee's right to develop additional outlets under the MUDA?
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's right to develop additional outlets under a Multi-Unit Development Agreement (MUDA) can be terminated if certain conditions are not met. Specifically, Crave Cookies has the right to terminate the franchisee's development rights if the franchisee fails to meet the mutually-agreed development schedule outlined in the MUDA. This schedule dictates the timeline for opening additional Crave Cookies locations within the designated territory.
In addition to adhering to the development schedule, the franchisee must also maintain sufficient financial and organizational capacity to successfully develop, open, operate, and manage each new Crave Cookies business. This ensures that the franchisee has the resources and expertise necessary to expand their operations effectively. Furthermore, the franchisee must remain in compliance with all brand requirements at their existing Crave Cookies businesses. This includes maintaining brand standards, operational procedures, and quality control measures.
Finally, the franchisee must not be in default under any other agreement with Crave Cookies. This means that the franchisee must fulfill all obligations and responsibilities outlined in any other contracts or agreements with the franchisor. However, the document also states that the franchisee is not obligated to develop additional outlets under the MUDA and may terminate it at any time without penalty. This provides the franchisee with some flexibility and control over their development plans.
In summary, while the MUDA offers the potential for expansion, it also carries the risk of termination if the franchisee fails to meet the agreed-upon development schedule, lacks the necessary financial and organizational capacity, violates brand requirements, or defaults on other agreements with Crave Cookies. Prospective franchisees should carefully consider these factors before entering into a MUDA with Crave Cookies.