Under what circumstances can Crave Cookies unilaterally terminate a franchise agreement?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
ill escalate according to the severity tier.
- a. First Offense: Verbal warning or a formal written warning, documented in the franchisee's file.
b. Second Offense:
- i. Mild Infraction: Official warning and mandatory review meeting.
- ii. Moderate Infraction: Fine or suspension of certain privileges; mandatory training (online, virtual, or in-person) may be required.
- iii. Severe Infraction: Immediate fine and mandatory meeting with corporate within 24 hours.
c. Third Offense:
- i. Mild Infraction: Fine of $100 and submission of a comprehensive improvement plan.
- ii. Moderate Infraction: Fine of $1,000 and follow-up audit within 30 days, along with a detailed improvement plan. For maintaining a 4.5-star rating, mandatory hiring of a reputation management and improvement company.
- iii. Severe Infraction: Fine of $5,000 and consideration for termination of the franchise agreement.
Section 4. DOCUMENTATION
Record Keeping: Crave Cookies Franchising, LLC will thoroughly document every step of the process, including warnings, communications, and the franchisee's responses.
Section 5. TERMINATION OF FRANCHISE AGREEMENT (LAST RESORT)
- A. Clear Grounds: Crave Cookies Franchising, LLC will define specific, egregious violations that warrant immediate termination.
- B.
Source: Item 23 — RECEIPTS (FDD pages 47–194)
What This Means (2025 FDD)
According to the 2025 Crave Cookies FDD, the franchise agreement can be terminated under certain circumstances. Specifically, a severe infraction, as determined by Crave Cookies, can lead to consideration for termination of the franchise agreement. An example of a severe infraction includes a third offense, which results in a fine of $5,000 and a mandatory meeting with corporate within 24 hours.
Crave Cookies outlines a process for handling infractions, including warnings, documentation, and opportunities for franchisees to rectify issues. The process involves escalating penalties for repeated offenses. For instance, a second moderate infraction may result in a fine or suspension of certain privileges, along with mandatory training. Crave Cookies emphasizes that termination is a last resort and will only occur after following a fair process that includes written notice and an opportunity for the franchisee to respond.
Additionally, in Maryland, the franchise agreement cannot permit unilateral termination without good cause or in bad faith, where good cause includes any material violation of the franchise agreement. In Washington, the Washington Franchise Investment Protection Act may supersede the franchise agreement in the area of termination.