In Virginia, is Crave Cookies allowed to cancel a franchise without reasonable cause?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
VIRGINIA ADDENDUM TO DISCLOSURE DOCUMENT
In the Commonwealth of Virginia only, this Disclosure Document is amended as follows:
The following statements are added to Item 17(h):
Under Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to cancel a franchise without reasonable cause. If any grounds for default or termination stated in the Franchise Agreement do not constitute "reasonable cause," as that term may be defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision may not be enforceable.
Under Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to use undue influence to induce a franchisee to surrender any right given to him under the franchise. If any provision of the Franchise Agreement involves the use of undue influence by the franchisor to induce a franchisee to surrender any rights given to the franchisee under the franchise, that provision may not be enforceable.
Item 17(t) is amended to read as follows:
Only the terms of the Franchise Agreement and other related written agreements are binding (subject to applicable state law). Any representations or promises outside of the Disclosure Document and Franchise Agreement may not be enforceable.
The Virginia State Corporation Commission's Division of Securities and Retail Franchising requires us to defer payment of the initial franchise fee and other initial payments owed by franchisees to the franchisor until the franchisor has completed its pre-opening obligations under the franchise agreement.
Source: Item 23 — RECEIPTS (FDD pages 47–194)
What This Means (2025 FDD)
According to Crave Cookies' 2025 Franchise Disclosure Document, the Virginia Retail Franchising Act protects franchisees from termination without reasonable cause. Specifically, the Virginia Addendum to the Disclosure Document states that it is unlawful for Crave Cookies to cancel a franchise in Virginia without "reasonable cause," as defined by the Virginia Retail Franchising Act or Virginia law. If any grounds for default or termination outlined in the Franchise Agreement do not meet the definition of "reasonable cause" under Virginia law, those provisions may not be enforceable. This addendum ensures that Virginia franchisees are afforded the protections of the Virginia Retail Franchising Act, which prevents franchisors from unfairly terminating franchise agreements.
Additionally, the addendum addresses undue influence, stating that it is unlawful for Crave Cookies to use undue influence to induce a franchisee to surrender any rights granted to them under the franchise. If any provision in the Franchise Agreement involves such undue influence, it may not be enforceable in Virginia. This provision aims to protect franchisees from being coerced into giving up their legal rights.
Furthermore, the Virginia Addendum clarifies that only the terms of the Franchise Agreement and other related written agreements are binding, subject to applicable state law. Any representations or promises made outside of the Disclosure Document and Franchise Agreement may not be enforceable. This emphasizes the importance of documenting all agreements in writing to ensure enforceability under Virginia law. The addendum also mentions that the Virginia State Corporation Commission's Division of Securities and Retail Franchising requires Crave Cookies to defer payment of the initial franchise fee and other initial payments until Crave Cookies has completed its pre-opening obligations under the franchise agreement, providing additional financial protection for franchisees.