Do Crepe De Licious' lease agreements contain any material residual value guarantees?

According to Crepe De Licious's 2025 Franchise Disclosure Document, the company's lease agreements do not contain any material residual value guarantees. This means that Crepe De Licious is not obligated to guarantee a specific value for the leased assets (retail space and vehicles) at the end of the lease term. This is a positive aspect for franchisees as it eliminates a potential financial risk associated with the leases.

In the context of leasing, a residual value guarantee would typically require Crepe De Licious to ensure that the leased asset retains a certain minimum value at the end of the lease. If the actual value is lower, Crepe De Licious would be responsible for covering the difference. The absence of such guarantees in Crepe De Licious's lease agreements means franchisees are not exposed to this particular liability.

However, it's important to note that while there are no residual value guarantees, the lease agreements do include variable lease payments. These payments are calculated based on eight percent of retail sales over a minimum gross sales amount of $824,000, payable in monthly increments once the minimum sales are reached. Franchisees should carefully consider these variable payment terms and their potential impact on overall lease expenses, especially in relation to sales performance.