How does the business experience of Crave's management (Item 2) relate to the initial fees charged (Item 5)?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
span id="page-10-2">Franchise Agreement: You must pay us an initial franchise fee of $45,000 for the right to establish a single Crave Restaurant under a Franchise Agreement. If you are purchasing your second or third Restaurant, the initial franchise fee will be reduced to $40,000. If you are purchasing your fourth or later Restaurant, the initial franchise fee will be reduced to $35,000.
You must pay us an initial franchise fee of $30,000 for the right to establish a single Crave Food Truck business under a Franchise Agreement. If you already own and operate a Crave Restaurant and desire to own and operate a Food Truck business, the initial franchise fee for the Food Truck will be reduced to $20,000.
From time to time, we may offer special incentive programs as part of our franchise development activities. We currently offer an incentive program where we will discount the initial franchise fee by $5,000 to veterans and active-duty military personnel for the first Franchised Business purchased. We have the right to offer, modify or withdraw any incentive program without notice to you. The initial franchise fee is imposed uniformly on all franchisees and is not refundable under any circumstances.
Grand Opening Marketing: You must pay us $5,000 if you are opening a Restaurant or $2,500 if you are starting a Food Truck business, for a grand opening marketing campaign that we will conduct on your behalf around the opening of your Franchised Business. This money is not refundable.
Multi-Unit Development Agreement: If you qualify to develop and operate multiple Crave Franchised Businesses, then you will pay to us a development fee equal to 100% of the initial franchise fee for the first Franchised Business you commit to develop under the Multi-Unit Development Agreement plus 50% of the initial franchise fee for each additional Franchised Business you commit to develop under the Multi-Unit Development Agreement. You may commit to develop any combination of Restaurants, Food Trucks, and Express Restaurants under a Multi-Unit Development Agreement. For example, if you commit to develop three Food Trucks, the development fee is calculated as $30,000 + (2 x $15,000 = $30,000) = $60,000. If you commit to develop three Restaurants, the development fee is calculated as $45,000 + (2 x $20,000 = $40,000) = $85,000. If you commit to develop a minimum of three units in some other combination of Food Trucks and Restaurants, the development fee will be an amount between $60,000 and $85,000. The development fee is fully earned by us when received and is not refundable or credited against any future fees payable by you under any Franchise Agreement or otherwise.
You will sign the Franchise Agreement for the first Franchised Business at the same time you sign the Multi-Unit Development Agreement, and we will apply a portion of the development fee to pay the initial franchise fee for the first Franchised Business in full. For each additional Franchised Business you will develop under the Multi-Unit Development Agreement, we will apply a credit of 50% of the amount of the initial franchise fee for that Franchised Business, and the balance of the initial franchise fee due for that Franchised Business is payable in a lump sum when you sign the Franchise Agreement for that Franchised Business. The development fee is imposed uniformly on all multi-unit developers and is not refundable under any circumstances.
There are no other purchases from or payments to us or any affiliate of ours that you must make before your Franchised Business opens for business.
ITEM 6 OTHER FEES
| (1) | (2)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, there is no information provided in Item 5 (Initial Fees) that directly relates to or discusses the business experience of Crave's management team (typically found in Item 2). Item 5 details the various initial fees a franchisee must pay to Crave, such as the initial franchise fee, grand opening marketing fees, and multi-unit development fees. These fees vary depending on the type of franchise (Restaurant or Food Truck) and the number of units being developed.
Item 5 outlines the initial franchise fee for a single Crave Restaurant is $45,000, while it is $30,000 for a Food Truck. Discounts are available for franchisees purchasing multiple units or for veterans and active-duty military personnel. A grand opening marketing fee of $5,000 for Restaurants and $2,500 for Food Trucks is also required. For multi-unit development agreements, the development fee is calculated based on the number and type of units committed, with specific examples provided in the FDD.
While Item 5 specifies the amounts and conditions for these initial fees, it does not provide any context or justification related to the management's experience. To understand how Crave's management experience influences these fees, a prospective franchisee should review Item 2 of the FDD, which covers the backgrounds and qualifications of the key management personnel. Further investigation beyond the FDD may also be beneficial, such as speaking with existing franchisees or directly inquiring with Crave about how their management's expertise contributes to the value and structure of the initial fees.