In the event of a premature termination of the Crisp & Green Development Agreement due to the franchisee's default, what is the amount the franchisee must pay for each of the first two Franchise Agreements they failed to sign?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
f this Agreement, all rights granted to you will automatically terminate, and:
A. All remaining rights granted to you to develop Franchised Restaurants under this Agreement will automatically be revoked and will be null and void. We will have the right to develop the Development Area or to contract with one or more other franchisees for the
future development of the Development Area. You will not be entitled to any refund of any fees.
B. You must within fifteen (15) days of the termination or expiration pay all sums owing to us and our Affiliates. In addition, in the event of any default by you that results in a premature termination of this Agreement (regardless of which party actually terminates this Agreement), in addition to any other remedies available to us, you must pay us, as a measure of our actual damages and not as a penalty, an amount equal to Twenty-Five Thousand Dollars ($25,000) for each of the first two (2) Franchise Agreements you failed to sign as required by this Agreement plus Ten Thousand Dollars ($10,000) for each additional Franchise Agreement you failed to sign as required by this Agreement. You agree that this amount is in addition to the Developm
Source: Item 23 — RECEIPTS (FDD pages 66–252)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, if the Development Agreement is prematurely terminated due to the franchisee's default, the franchisee must pay Crisp & Green $25,000 for each of the first two Franchise Agreements they failed to sign. Additionally, the franchisee must pay $10,000 for each additional Franchise Agreement they failed to sign.
This payment is considered a measure of Crisp & Green's actual damages and not a penalty. It is in addition to the Development Fees already paid under the agreement. Crisp & Green considers this payment compensation for lost revenues from royalty fees and other amounts, as well as for the franchisee holding the development rights and preventing others from developing restaurants in the Development Area.
However, if a court determines that this damages payment is unenforceable, Crisp & Green may pursue all other available remedies, including consequential damages. This clause highlights the importance of adhering to the Development Schedule and fulfilling the obligations outlined in the Development Agreement to avoid potential financial repercussions in the event of termination due to default.