Does the Crisp & Green addendum create new obligations for the franchisor?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
ADDENDUM TO THE CRISP & GREEN AREA DEVELOPMENT AGREEMENT FOR THE STATE OF NEW YORK
Notwithstanding anything to the contrary set forth in the Crisp & Green Franchising LLC Area Development Agreement, the following provisions shall supersede any inconsistent provisions and apply to all Crisp & Green franchises offered and sold in the state of New York:
This New York Addendum is only applicable if you are a resident of New York or if your business will be located in New York.
- Section 9 of the Area Development Agreement is revised to include the following language:
Provided, however, that all rights arising under Franchisee's favor from the provisions of Article 33 of the GBL of the State of New York and the regulations issued thereunder shall remain in force; it being the intent of this provision that the non-waiver provisions of GBL Section 687.4 and 687.5 be satisfied.
- The Area Development Agreement is modified by the addition of the following to Section 5:
In addition, Franchisee shall have the right to terminate the Area Development Agreement to the extent allowed under applicable law.
- Section 7 of the Area Development Agreement is revised to include the following:
Franchisor will not make an assignment except to an assignee who, in Franchisor's good faith judgment, is willing and able to assume its obligations under the Agreement.
Source: Item 23 — RECEIPTS (FDD pages 66–252)
What This Means (2024 FDD)
According to the 2024 Crisp & Green FDD, several addenda modify the Area Development Agreement and Franchise Agreement, potentially creating new obligations for the franchisor, particularly in specific states like New York, North Dakota, Rhode Island, Virginia, and Indiana. These addenda address compliance with state-specific franchise laws and regulations.
For instance, the New York addendum ensures that franchisees retain all rights and causes of action under New York's General Business Law, preventing waivers of these rights. It also allows franchisees to terminate the agreement based on grounds available under New York law. Additionally, it clarifies that Crisp & Green's right to injunctive relief is subject to proper proofs and approval by the appropriate authority. These modifications ensure compliance with New York statutes and regulations, potentially adding obligations for Crisp & Green to adhere to these specific legal requirements.
Similarly, the Virginia addendum addresses restrictions in the Virginia Retail Franchising Act, stating that it is unlawful for a franchisor to cancel a franchise without reasonable cause. It also specifies that any representations outside the franchise agreement may not be enforceable, subject to state law. Furthermore, the addendum ensures that franchisees cannot waive claims under state franchise law. These provisions may create additional obligations for Crisp & Green to ensure its practices align with Virginia's franchising laws. The addendum for landlords also stipulates that the landlord must provide the Franchisor with written notice of any default or violation by the tenant (franchisee) under the lease, giving the Franchisor the right to cure the default.
In practical terms, these addenda mean that Crisp & Green must be aware of and comply with the specific franchise laws of each state in which it operates, especially concerning termination, franchisee rights, and dispute resolution. Prospective franchisees should carefully review the addendum applicable to their state to understand how it modifies the standard franchise agreement and what additional protections or obligations it provides.