What conditions must a Crave multi-unit developer meet to obtain franchisor approval for a transfer of the Multi-Unit Development Agreement?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Multi- | Summary | |
|---|---|---|---|
| Unit Development Agreement | |||
| 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 | 10 | You must stop selecting sites for Franchised | |
| obligations on termination/ | Businesses, and you may not open any more | ||
| non-renewal | 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. | |
| k. “Transfer” by multi-unit | 11 | Includes transfer of any interest in the Multi- | |
| developer – defined | Unit Development Agreement | ||
| l. Franchisor approval of transfer by multi-unit developer | 11 | We have the right to approve all transfers, our consent not to be unreasonably withheld | |
| m. Conditions for franchisor approval of transfer | 11 | Conditions for transfer include not being in default, at least 25% of all Franchised Businesses required to be developed are open or under construction, all debts are paid, the buyer meets our current criteria for new Multi- Unit Developers, execution of a general release, payment of transfer fee, buyer personally guarantees all obligations | |
| n. |
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, a multi-unit developer seeking to transfer their Multi-Unit Development Agreement must meet several conditions to gain franchisor approval. Crave retains the right to approve all transfers, but assures that consent will not be unreasonably withheld.
The conditions for transfer include ensuring that the developer is not in default of the agreement. Additionally, at least 25% of all Franchised Businesses required under the development agreement must be open or under construction. The developer must also ensure that all debts owed to Crave are paid in full before the transfer can proceed.
Furthermore, the buyer, or the entity to whom the agreement is being transferred, must meet Crave's current criteria for new Multi-Unit Developers. This suggests that Crave will assess the buyer's financial capabilities, business experience, and other qualifications to ensure they are capable of fulfilling the development obligations. The transferring developer must also execute a general release, which likely involves releasing Crave from any potential future claims or liabilities related to the development agreement. Finally, the buyer must personally guarantee all obligations under the Multi-Unit Development Agreement, providing Crave with an additional layer of security.
Crave also has the right of first refusal to acquire the multi-unit developer’s business, meaning Crave can match the offer made by the potential buyer and acquire the business itself. These conditions and rights ensure that Crave maintains control over its expansion and protects its interests when a multi-unit developer seeks to transfer their development agreement.