What happens if I fail to meet the opening deadline for my Crisp & Green franchise?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
ficates of insurance.
We may, but are not obligated to, grant you extensions of any opening deadlines if we determine, in our sole discretion, that you are expending good faith best efforts to complete site development and the opening process and pay a fee for the extension of up to $5,000. However, in the event your Franchised Restaurant is not open and operating in compliance with our standards within nine months after the date of
the Franchise Agreement (or within the required opening date for a subsequent Franchised Restaurant if you have signed an Area Development Agreement), unless you have obtained an extension to this requirement, you will be required to pay us the Minimum Royalty Fee of $7,500 plus 7% of your Gross Sales, if any, for each month until your Franchised Restaurant opens in compliance with our standards (prorated for partial months). Additionally, if the Franchised Restaurant does not open for operation in compliance with our standards by the required opening date, unless you have received an approved extension, we may terminate the Franchise Agreement.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 26–31)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, franchisees are generally required to open their restaurant within nine months of signing the Franchise Agreement. If the franchisee has signed an Area Development Agreement, they must open their first restaurant within nine months of the initial Franchise Agreement and subsequent locations according to the deadlines outlined in the Area Development Agreement.
If a Crisp & Green franchisee fails to meet the opening deadline, the franchisor may, at its discretion, grant an extension if the franchisee is making a good faith effort to complete the opening process. The franchisee may be required to pay a fee of up to $5,000 for this extension. However, if the restaurant is not open within the specified timeframe and an extension has not been granted, the franchisee will be required to pay a Minimum Royalty Fee of $7,500, plus 7% of gross sales (if any), for each month until the restaurant opens in compliance with Crisp & Green's standards. This fee is prorated for partial months.
Furthermore, Crisp & Green retains the right to terminate the Franchise Agreement if the restaurant does not open by the required date, assuming no extension has been approved. This highlights the importance of adhering to the opening deadlines and communicating proactively with the franchisor regarding any potential delays. Franchisees should carefully review the Area Development Agreement for specific opening requirements related to multiple locations.
Prospective franchisees should consider these financial implications and potential termination risks when evaluating the Crisp & Green franchise opportunity. It is crucial to have a well-developed plan for site development and opening to avoid these penalties.