Under the Crisp & Green development agreement, what is required for each Franchised Restaurant to be developed and operated?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
Each Franchised Restaurant must be developed and operated by you under a separate Franchise Agreement that you enter into with us.
- A. You must comply with the Development Schedule requirements regarding: (i) the execution of the Franchise Agreements; (ii) the opening date for each Franchised Restaurant; and (iii) the cumulative number of Franchised Restaurants to be open and continuously operating for business in the Development Area. If you fail to either sign a Franchise Agreement or to open a Franchised Restaurant according to the dates set forth in the Development Schedule, we, in our sole discretion, may immediately terminate this Agreement under Section 5, or alter your Development Area as described in Section 1.C.
- B. You may not open a Franchised Restaurant under this Agreement unless you meet each of the following conditions (these conditions apply to each Franchised Restaurant to be developed in the Development Area):
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- You must not be in default of this Agreement, any Franchise Agreement entered into under this Agreement, or any other agreement between you or any of your Affiliates and us or any of our Affiliates. You also must have satisfied on a timely basis all monetary
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and material obligations under the Franchise Agreements for all existing Franchised Restaurants.
You and we have entered into our then-current form of Franchise Agreement and such other agreements that we require for the grant of CRISP & GREEN franchises for the proposed Franchised Restaurant.
You understand that we may modify the then-current form of Franchise Agreement from time to time and that it may be different than the current form of Franchise Agreement, including different fees and obligations; provided, however, that you will not be required to pay any initial franchise fee under any of those agreements.
You understand and agree that any and all Franchise Agreements will be construed and exist independently of this Agreement.
The continued existence of each Franchise Agreement will be determined by the terms and conditions of the Franchise Agreement.
Except as specifically set forth in this Agreement, the establishment and operation of each Franchised Restaurant must be in accordance with the terms of the applicable Franchise Agreement.
You will be solely responsible for identifying, submitting for our approval, and securing specific sites for each Franchised Restaurant.
For purposes of determining compliance with this Development Schedule, only the Franchised Restaurants you actually open and continuously operate in the Development Area for at least the first six (6) months after opening will be counted toward the number of Franchised Restaurants required to be open and operated by you.
Source: Item 23 — RECEIPTS (FDD pages 66–252)
What This Means (2024 FDD)
According to the 2024 Crisp & Green Franchise Disclosure Document, each Franchised Restaurant must be developed and operated under a separate Franchise Agreement that the developer enters into with Crisp & Green. The developer must comply with the Development Schedule, which outlines requirements for executing Franchise Agreements and the opening dates for each restaurant. The schedule also specifies the cumulative number of restaurants that must be open and continuously operating in the Development Area.
To open a Crisp & Green restaurant under the development agreement, the developer must not be in default of the agreement, any Franchise Agreement, or any other agreement with Crisp & Green or its affiliates. They must also satisfy all monetary and material obligations under the Franchise Agreements for all existing restaurants. Additionally, the developer and Crisp & Green must enter into the then-current form of Franchise Agreement and any other agreements required by Crisp & Green for granting franchises. It's important to note that the form of the Franchise Agreement may change over time, potentially including different fees and obligations, although no initial franchise fee will be required under these agreements.
The Franchise Agreements are construed and exist independently of the development agreement, with their continued existence determined by their own terms and conditions. The establishment and operation of each restaurant must align with the terms of the applicable Franchise Agreement, and the developer is solely responsible for identifying, submitting for approval, and securing specific sites for each restaurant. For the purposes of meeting the Development Schedule, only restaurants that are actually opened and continuously operated in the Development Area for at least the first six months after opening will count towards the required number of operating restaurants.
In practical terms, this means a Crisp & Green area developer needs to carefully manage their development schedule, maintain good standing with the franchisor, and proactively secure suitable locations. The independence of each Franchise Agreement from the Development Agreement also underscores the importance of understanding the terms and conditions of each individual Franchise Agreement as it is signed. The requirement that restaurants must operate for six months to count toward the development schedule ensures that developers are focused on establishing sustainable, long-term businesses rather than simply opening locations to meet a quota.