Does Crepe De Licious have the right to undertake a refinancing, recapitalization, or leveraged buyout?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
You expressly affirm and agree that we may sell our assets, our rights to the Marks or to the System outright to a third party; may go public; may engage in a private placement of some or all of our securities; may merge, acquire other corporations, or be acquired by another corporation; may undertake a refinancing, recapitalization, leveraged buyout or other economic or financial restructuring; and, with regard to any or all of the above sales, assignments and dispositions, you expressly and specifically waive any claims, demands or damages arising from or related to the loss of said Marks (or any variation thereof) and/or the loss of association with or identification of "Crepe Delicious Holding USA, Inc." as the franchisor. Nothing contained in this Agreement shall require us to remain in the restaurant business or to offer the same products and services, whether or not bearing the Marks, in the event that we exercise our right to assign our rights in this Agreement.
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
According to Crepe De Licious's 2025 Franchise Disclosure Document, the company retains the right to undertake a refinancing, recapitalization, or leveraged buyout. This means that Crepe De Licious has the explicit right to restructure its finances, ownership, or debt through various financial transactions.
For a prospective franchisee, this clause signifies that the ownership and financial structure of Crepe De Licious could change during the term of their franchise agreement. While this might not directly impact the day-to-day operations of the franchise, it could lead to changes in the strategic direction, management, or financial stability of the company. Franchisees should be aware that such changes are possible and could influence the support and resources available to them.
Furthermore, the agreement includes a waiver where the franchisee expressly waives any claims, demands, or damages related to the loss of the Marks or association with "Crepe Delicious Holding USA, Inc." as the franchisor due to these sales, assignments, and dispositions. This waiver means that if Crepe De Licious undergoes a change in ownership or structure that results in a loss of brand identity or association, franchisees cannot seek damages from Crepe De Licious for these changes. This is a significant point for potential franchisees to consider, as it limits their recourse in the event of substantial changes to the franchise system.