What is included in 'all sums' owed to Crepe De Licious upon termination of the franchise agreement?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
ation obligations in Section 17; and the purported transferee may not operate the Franchised Business under the Marks or the System.
15.03 Transfer Conditions. We may, to the extent permitted by applicable law, condition and withhold our consent to a Transfer, when required under Section 15.02 until the transferee and you meet certain conditions. If a Transfer is to occur: (a) the proposed transferee must apply for a Crepe de licious franchise and must meet all of our then-current standards and requirements for becoming a Crepe de licious franchisee, in our sole discretion; (b) you or the proposed transferee must provide to us in writing the circumstances of the proposed Transfer; (c) the proposed transferee must provide to us the same supporting documents as a new franchise applicant; (d) you or the proposed transferee must pay us a transfer fee of $10,000 ($5,000 if the proposed transferee is an existing Crepe de licious franchisee), including a non-refundable $1,000 deposit that is due upon the request for approval of a Transfer (e) the proposed transferee must sign the form of franchise agreement and related documents we then offer to prospective franchisees, which agreement will provide for a new initial term of five (5) years, and the transferee's owners will sign the form of owners agreement or guaranty we then require of franchisees' owners; (f) the proposed transferee and its designated manager must complete to our satisfaction the initial training then required for new franchisees and their designated managers; (g) you or the proposed transferee must refurbish the Restaurant, Kiosk, or Food Truck to conform to our then-current standards and specifications; (h) we must receive general releases from you and each of your owners, and payment of all amounts then owed to us and our affiliates by you and your owners and affiliates, and the transferee and its owners and affiliates, under this Agreement or otherwise; (i) you must not be in default under this Agreement or any other agreement with us or any of our affiliates; (j) you must give us at least 30 days' prior written notice of any proposed Transfer; (k) you must reimburse us upon receipt of our invoice for any broker or other placement fees we incur as a result of the transfer; (l) the Restaurant, Kiosk, or Food Truck must be in operation for at least one (1) year, if we have not exercised right of first refusal; (m) the proposed transferee must have sufficient business experience and financial resources to operate the Franchise; (n) your landlord must consent to transfer the lease to the proposed transferee;
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
Based on the 2025 Crepe De Licious Franchise Disclosure Document, the obligation to pay 'all sums' owed to Crepe De Licious becomes relevant when a franchisee seeks to transfer their franchise. Specifically, before a transfer can be approved, the franchisor requires 'payment of all amounts then owed to us and our affiliates by you and your owners and affiliates, under this Agreement or otherwise'.
This requirement ensures that Crepe De Licious receives all outstanding payments before a franchise changes hands. This could include unpaid franchise fees, royalties, marketing contributions, or any other debts incurred during the franchisee's operation of the Crepe De Licious business. The phrase 'or otherwise' suggests that any financial obligations to Crepe De Licious, even those not explicitly outlined in the franchise agreement, must be settled.
For a prospective Crepe De Licious franchisee, this condition highlights the importance of maintaining good financial standing with the franchisor. Failure to do so could impede the ability to sell the franchise in the future. It also underscores the need to carefully review the franchise agreement and any related documents to fully understand all potential financial obligations to Crepe De Licious and its affiliates. Franchisees should also keep detailed records of all payments made to Crepe De Licious to avoid disputes during a potential transfer.