What does Item 17 of the Crisp & Green FDD generally discuss?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
ITEM 17 RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION
This table lists certain important provisions of the franchise and related agreements. You should read these provisions in the agreements attached to this disclosure document.
THE FRANCHISE RELATIONSHIP
| Provision | Section in Franchise | ||
|---|---|---|---|
| or Other Agreement | |||
| u. Dispute resolution by arbitration or mediation | Section 18.05 – Franchise Agreement and Section 9 – Area Development Agreement | Except for claims for injunctive relief, we make seek against you, all disputes must be arbitrated in the city closest to our corporate headquarters (currently Wayzata, MN). Subject to applicable state law. | |
| v. Choice of forum | Section 18.07 – Franchise Agreement and Section 9 – Area Development Agreement | Subject to applicable state law, disputes must be arbitrated or litigated in the city closest to our corporate headquarters (currently Wayzata, MN). | |
| w. Choice of law | Section 18.08 – Franchise Agreement and Section 9 – Area Development Agreement | Subject to applicable state law, Minnesota law applies, provided that the Minnesota Franchise Act and other franchise-specific laws and regulations of the State of Minnesota generally do not apply to Restaurants located outside of Minnesota. |
Notes
(1) If you operate multiple Franchised Restaurants pursuant to an Area Development Agreement, then, pursuant to Section 14.03 of each Franchise Agreement (i) a default under a Franchise Agreement signed pursuant to the Area Development Agreement will be a default under the Area Development Agreement as well, which may, depending upon the nature of the default, entitle us to terminate the Area Development Agreement, and (ii) a default under an Area Development Agreement will be a default under each Franchise Agreement subject thereto, which may, depending upon the nature of the default, entitle us to terminate each such Franchise Agreement. Notwithstanding the foregoing, in the event that the Area Development Agreement is terminated as a result of the failure to comply with the Development Schedule set forth therein, such termination of the Area Development Agreement will not result in a termination of a Franchise Agreement if you have fully performed and otherwise been in compliance with all of your obligations under such Franchise Agreement.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 52–57)
What This Means (2024 FDD)
According to the 2024-2025 Crisp & Green FDD, Item 17 outlines the provisions related to renewal, termination, transfer, and dispute resolution of the franchise agreement. This section is crucial for prospective franchisees as it details the circumstances under which the franchise agreement can be renewed, terminated by either party, or transferred to another owner. It also covers how disputes between the franchisee and Crisp & Green will be resolved.
Specifically, Item 17 includes a table summarizing key provisions of the franchise and related agreements. This table references the sections in the Franchise Agreement and Area Development Agreement that pertain to dispute resolution, choice of forum, and choice of law. For instance, it states that disputes, excluding claims for injunctive relief, must be arbitrated in the city closest to Crisp & Green's corporate headquarters, which is currently Wayzata, MN. The choice of forum and governing law also default to Wayzata, MN and Minnesota law, respectively, subject to applicable state law.
Furthermore, Item 17 addresses the implications of defaults under the Area Development Agreement. If a franchisee operates multiple Crisp & Green restaurants under an Area Development Agreement, a default under one Franchise Agreement can trigger a default under the Area Development Agreement, potentially leading to its termination. Conversely, a default under the Area Development Agreement can also result in the termination of all related Franchise Agreements. However, the FDD notes an exception: termination of the Area Development Agreement due to failure to meet the development schedule will not result in the termination of a Franchise Agreement if the franchisee has fully performed their obligations under that specific Franchise Agreement. This is an important consideration for franchisees planning to expand with Crisp & Green.