Is Crepe De Licious liable for any employment-related actions or settlements at a franchised business?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
New Franchisee acknowledges and agrees that the purchase of the rights to the Franchised Business ("Transaction") occurred solely between Former Franchisee and New Franchisee.
New Franchisee also acknowledges and agrees that Franchisor played no role in the Transaction and that Franchisor's involvement was limited to the approval of Requested Assignment and any required actions regarding New Franchisee's signing of the New Franchise Agreement for the Franchised Business.
New Franchisee agrees that any claims, disputes, or issues relating New Franchisee's acquisition of the Franchised Business from Franchisee are between New Franchisee and Former Franchisee, and shall not involve Franchisor.
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
Based on the 2025 Crepe De Licious Franchise Disclosure Document, the franchisor, Crepe De Licious Holding USA, Inc., explicitly disclaims involvement in the transaction between a new and former franchisee. Specifically, the document states that the franchisor plays no role in the purchase of rights to the franchised business between the former and new franchisees, with their involvement limited to approving the requested assignment and actions related to the new franchisee signing the New Franchise Agreement.
According to the FDD, any claims, disputes, or issues related to the new franchisee's acquisition of the franchised business from the former franchisee are strictly between those two parties. Crepe De Licious is not to be involved in these matters. This suggests that Crepe De Licious aims to remain separate from disputes arising from the transfer of ownership between franchisees.
This arrangement has significant implications for prospective franchisees. It clarifies that Crepe De Licious is not responsible for any liabilities or obligations arising from the transition of ownership. New franchisees must conduct their due diligence and resolve any issues directly with the former franchisee, without relying on Crepe De Licious to mediate or assume responsibility. This underscores the importance of thorough legal and financial review during the acquisition process to protect the new franchisee's interests.