What are the conditions for Crave to assign the Multi-Unit Development Agreement to another party?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Multi Unit Development Agreement | Summary | |
|---|---|---|---|
| h. | "Cause" defined – non curable defaults | 9 | Failure to meet your minimum performance schedule; failure to comply with applicable laws; if all of your Franchised Businesses stop operating; unauthorized transfer; you make a material misrepresentation to us; conviction by you or your owners of an indictable offense; bankruptcy or insolvency; if a Franchise Agreement with us is terminated according to its terms (this is a cross-default provision) |
| i. | Multi-unit developer's obligations on termination/ non-renewal | 10 | You must stop selecting sites for Franchised Businesses, and you may not open any more Franchised Businesses |
| j. | Assignment of contract by franchisor | 11 | No restriction on our right to assign. However, no assignment will be made except to an assignee who, in our good faith judgment, is willing and able to assume our obligations under the Multi-Unit Development Agreement. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 50–56)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, Crave has the right to assign the Multi-Unit Development Agreement to another party. The FDD states that there are no restrictions on Crave's right to assign the agreement. However, Crave will only make an assignment to a party who, in Crave's good faith judgment, is willing and able to assume Crave's obligations under the Multi-Unit Development Agreement.
This means that a prospective Crave franchisee should be aware that Crave could transfer its obligations to a new entity at any time. While Crave must believe the new entity is capable of fulfilling the agreement, the franchisee has limited control over this decision.
This is a fairly standard clause in franchise agreements, as it allows the franchisor flexibility in structuring its business. However, it's important for franchisees to understand that the entity they initially contract with may not be the entity they deal with throughout the entire term of the agreement. Franchisees should conduct thorough due diligence not only on the current franchisor but also understand the potential implications of a transfer to a new entity.