What is the calculation for the Crave development fee?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
cordance with Section 3.1 hereof.
- 1.3 Except as otherwise provided in this Agreement, we shall not establish, nor franchise anyone other than you to establish, a dedicated Crave outlet in the Development Area during the term of this Agreement, provided you are not in default hereunder.
- 1.4 This Agreement is not a Franchise Agreement and does not grant to you any right to use the Marks or System.
- 1.5 You shall have no right under this Agreement to franchise others under the Marks or System.
SECTION 2 DEVELOPMENT FEE; INITIAL FRANCHISE FEES
- 2.1 In consideration of the Development Rights granted herein, you shall pay to us a development fee of ___________________________ Thousand Dollars ($____________), payable upon execution of this Agreement ("Development Fee"). The Development Fee is calculated as one hundred percent (100%) of the initial franchise fee for the first Franchised Business to be developed hereunder, plus a deposit equal to fifty percent (50%) of the initial franchise fee for each additional Franchised Business to be developed hereunder.
- 2.2 The Development Fee shall be fully earned by us upon execution of this Agreement, is not refundable, and will not be credited against any other fees you may pay to us pursuant to this Agreement or any Franchise Agreement.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, the development fee is calculated as 100% of the initial franchise fee for the first franchised business, plus a deposit equal to 50% of the initial franchise fee for each additional franchised business to be developed. For restaurant outlets, the initial franchise fee is $45,000 for the first restaurant, $40,000 for the second and third, and $35,000 for the fourth and each additional restaurant. For each food truck outlet, the initial franchise fee is $30,000.
For a prospective franchisee, this means that the upfront investment for development rights will vary depending on the type and number of units they plan to develop. For example, if a franchisee plans to develop three restaurant locations, the development fee would be $45,000 (100% of the first restaurant) + $20,000 (50% of the second restaurant) + $20,000 (50% of the third restaurant) = $85,000. This fee is non-refundable and is earned by Crave upon execution of the agreement.
It is important to note that the initial franchise fee for the first franchised business is considered paid as part of the development fee. The franchisee will execute the Franchise Agreement for the first Franchised Business when they execute the Development Agreement, and the development fee covers the initial franchise fee for that first location. This structure incentivizes multi-unit development by allowing franchisees to spread out the initial investment over multiple locations, while also ensuring Crave receives compensation upfront for granting development rights.