How does the business experience of Crave's management (Item 2) relate to the ongoing fees charged (Item 6)?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
luding travel, lodging and meals. |
| (1) | (2) | (3) | (4) |
|---|---|---|---|
| Fees (1) | Amount | Due Date | Remarks |
| Interest | 18% per annum or the highest interest rate allowed by applicable law, whichever is greater | On demand | Interest may be charged on all overdue amounts. Interest accrues from the original due date until payment is received in full. |
| Audit Fee | Cost of audit (estimated to be between $1,000 and $5,000) | When billed | Payable only if we find, after an audit, that you have understated Gross Sales by 2% or more or you have understated any amount you owe to us. You must also pay the understated amount plus interest. |
| Insufficient Funds Fee | $100 per occurrence | On demand, if incurred | Payable if there are insufficient funds in your account to pay fees due to us. If you incur three insufficient funds fees in any 12-month period, we have the right to terminate your Franchise Agreement. |
| Transfer Fee – Transfer Between Owners | $5,000 | With request for approval of transfer | For any transfer of ownership interests or shares between the owners of the franchise, or if you are adding a new owner (as long as majority ownership does not change). |
| Transfer Fee – Franchise Agreement | $5,000 | With request for approval of transfer | No fee charged for a one time transfer from individual(s) to a corporate entity formed for convenience of ownership of the franchise. |
| Transfer Fee – Multi Unit Development Agreement | $5,000 | With request for approval of transfer | No fee charged for a one time transfer from individual(s) to a corporate entity formed for convenience of ownership of the franchise. |
| Successor Agreement Fee | $5,000 | Upon signing of the successor Franchise Agreement | |
| (1) | (2) | (3) | (4) |
| --------------------------------------------------------- | ----------------------------------------------------------------------------------------------- | ----------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Fees (1) | Amount | Due Date | Remarks |
| Relocation Fee | $5,000 | With request for approval of relocation | If you wish to relocate your Restaurant or operate your Food Truck in a different municipality. |
| Inspection / Product and Supplier Evaluation | $250 per product or supplier to be evaluated, plus reimbursement of our expenses | On demand | Payable if you request that we evaluate a product or supplier that we have not previously approved and that you want to use for your Franchised Business. Payable also if we determine that your Franchised Business is offering items that do not conform to our specifications. |
| Liquidated Damages | See footnote 5 | ||
| Costs and Attorneys' Fees | Will vary under circumstances | On demand | If you default under your agreement, you must reimburse us for the expenses we incur (such as attorneys' fees) in enforcing or terminating the agreement. |
| Indemnification | Will vary under circumstances | On demand | You must reimburse us for the costs we incur if we are sued or held liable for claims that arise from your operation of the Franchised Business or for costs associated with defending claims that you used the trademarks in an unauthorized manner. |
| Repair, Maintenance, and Remodeling/ Redecorating | Will vary under circumstances | As incurred | Payable to approved suppliers. You must regularly clean and maintain your Franchised Business and its equipment. We may require you to remodel or redecorate your Franchised Business to meet our then current image for all Crave businesses. We will not require you to remodel or redecorate your Franchised Business more |
What This Means (2025 FDD)
Based on the 2025 FDD, there is no direct discussion in Item 6 about how Crave's management's business experience (detailed in Item 2) relates to the ongoing fees. Item 6 outlines various fees franchisees may incur, such as interest on overdue amounts, audit fees if gross sales are understated by 2% or more (estimated between $1,000 and $5,000), insufficient fund fees of $100 per occurrence, and transfer fees of $5,000 for various ownership changes. These fees are uniformly imposed and subject to change based on market conditions or policy changes.
Item 6 also mentions ongoing fees related to reporting gross sales, royalty fees, and brand development fees. Franchisees must report gross sales weekly, and Crave will withdraw royalty and brand development fees via electronic funds transfer. Failure to report gross sales may result in Crave debiting 120% of the last debited amount. Additionally, franchisees may be required to pay for participation in a "mystery shopper" quality control program and reimburse Crave for costs and attorneys' fees if the franchisee defaults under the agreement.
While the FDD details the types and amounts of ongoing fees, it does not explicitly connect these fees to the experience or expertise of Crave's management team. A prospective franchisee would need to seek clarification from Crave regarding how management's experience influences the setting, management, or utilization of these fees. For example, understanding how management's experience informs decisions about the Brand Development Fund or the selection of suppliers could be valuable information for a potential franchisee.