In Virginia, when can Crave Cookies collect the initial franchise fee from a franchisee?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
Because franchisor has material pre-opening obligations with respect to each franchised business Franchisee opens under the Multi-Unit Development Agreement, payment of the franchise fee will be released proportionally with respect to each franchise outlet opened and until franchisor has met all its pre- opening obligations under the Agreement and Franchisee is open for business with respect to each such location.
Source: Item 23 — RECEIPTS (FDD pages 47–194)
What This Means (2025 FDD)
According to Crave Cookies' 2025 Franchise Disclosure Document, the ability to collect the initial franchise fee in Virginia is tied to the fulfillment of pre-opening obligations. Specifically, Crave Cookies can collect the initial franchise fee proportionally as each franchise outlet opens, but only after they have met all their pre-opening obligations for that location and the franchisee is open for business. This condition is outlined in an addendum to the disclosure document applicable to Virginia.
This arrangement protects the franchisee by ensuring that they only pay the franchise fee for each location once Crave Cookies has provided the necessary support and met its obligations to help get that location up and running. It also means that the franchisee isn't paying for services or support that haven't been delivered yet, reducing the financial risk associated with opening a new franchise location.
This proportional release of the franchise fee is contingent upon Crave Cookies fulfilling its pre-opening responsibilities. These obligations likely include site selection assistance, training, providing operations manuals, and other forms of support necessary to launch the franchise. The franchisee should carefully review the franchise agreement and related documents to fully understand what these pre-opening obligations entail.
Prospective franchisees in Virginia should pay close attention to the specific pre-opening obligations outlined in their agreement with Crave Cookies and ensure that these obligations are clearly defined and measurable. They should also maintain thorough records of all interactions and deliverables related to the opening of each franchise location to ensure compliance and facilitate the proportional release of the franchise fee.