In the context of assigning a Crepe De Licious franchise, what is the role of the 'New Franchisee'?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
sted Assignment of Franchised Business. | | Franchisor hereby consents to | | the Requested Assignment of the Franchised Business from Former Franchisee to New Franchisee upon | | receipt of the Franchisor's Assignment Fee from Former Franchisee and the mutual execution of this | | Agreement by all parties. | | Franchisor waives its right of first refusal set forth in the Former Franchise | | Agreement and waives any obligation for Former Franchisee to enter into a subordination agreement |
effective upon the date of this Agreement, the Former Franchise Agreement shall terminate and all of
- Termination of Rights to the Franchised Business. The parties acknowledge and agree that
pursuant to the Former Franchise Agreement.
Former Franchisee's rights to operate the Franchised Business are terminated and that from the date of this Agreement only New Franchisee shall have the sole right to operate the Franchised Business under the New Franchise Agreement. Former Franchisee and the undersigned Owners agree to comply with all of the covenants in the Former Franchise Agreement that expressly or by implication survive the termination, expiration, or transfer of the Former Franchise Agreement. Unless otherwise precluded by state law, Former Franchisee shall execute Franchisor's current form of General Release Agreement.
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- New Franchise Agreement. New Franchisee shall execute the New Franchise Agreement for the Franchised Business (as amended by the form of Addendum prescribed by Franchisor, if applicable), and any other required contracts for the operation of a Crepe de licious franchise as stated in Franchisor's Franchise Disclosure Document.
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- Former Franchisee's Contact Information.
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
According to the 2025 Crepe De Licious Franchise Disclosure Document, the 'New Franchisee' assumes several key roles and responsibilities when a franchise is assigned from a 'Former Franchisee.' The New Franchisee is the party who acquires the rights to operate the Franchised Business under a new franchise agreement. This involves executing the New Franchise Agreement, including any amendments prescribed by Crepe De Licious. The New Franchisee acknowledges that the Franchisor's role is limited to approving the assignment and the signing of the New Franchise Agreement and that the purchase transaction occurred solely between the Former Franchisee and the New Franchisee.
Specifically, the New Franchisee agrees that any claims, disputes, or issues relating to the acquisition of the Franchised Business are between the New Franchisee and the Former Franchisee, and will not involve Crepe De Licious. This means the New Franchisee must conduct thorough due diligence on the business being acquired, as Crepe De Licious will not mediate or be responsible for any disputes arising from the sale. The New Franchisee takes on the responsibility of operating the Crepe De Licious franchise according to the standards and agreements set forth by the franchisor in the new agreement.
In practical terms, a prospective New Franchisee should be aware that they are essentially buying a business from another franchisee, not directly from Crepe De Licious. While Crepe De Licious must approve the transfer and will provide a new franchise agreement, the onus is on the New Franchisee to ensure they are making a sound investment. This includes carefully reviewing the Former Franchisee's business records, assessing the location, and understanding any potential liabilities or issues with the existing operation. The New Franchisee should also seek legal and financial advice to protect their interests during the acquisition process.