What are the consequences of failing to meet the Minimum Performance Schedule for open Crave Franchised Businesses?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
To maintain your rights under the Multi-Unit Development Agreement you must have open and in operation the cumulative number of Franchised Businesses stated on the Minimum Performance Schedule by the dates agreed upon in the Minimum Performance Schedule. Failure to do so will be grounds for either a loss of territorial exclusivity or the termination of the Multi-Unit Development Agreement.
In addition, when the last Franchised Business to be developed within the Development Area opens for business, your rights under the Multi-Unit Development Agreement with respect to the Development Area will have expired and we and our affiliates will have the right to operate and to grant to others development rights and franchises to develop and operate Restaurants and Food Trucks within the Development Area. This right will be subject only to the territorial rights under your franchise agreements for Restaurants and Food Trucks in the Development Area and the right of first refusal to develop additional Franchised Businesses described above. The Development Area may not be altered unless we and you mutually agree to do so. It will not be affected by your sales volume. You are not granted any other option, right of first refusal or similar right to acquire additional Franchised Businesses in your Development Area under the Multi-Unit Development Agreement, except as described above.
Source: Item 12 — TERRITORY (FDD pages 42–46)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, franchisees entering into a Multi-Unit Development Agreement must adhere to the Minimum Performance Schedule for opening Franchised Businesses. Failure to meet the agreed-upon schedule can result in significant repercussions. Specifically, Crave may either revoke the franchisee's territorial exclusivity or terminate the entire Multi-Unit Development Agreement. This means the franchisee could lose the exclusive right to develop Crave restaurants or food trucks within their designated area, or even lose the entire development agreement.
Furthermore, the FDD states that once the last Franchised Business to be developed within the Development Area opens, the franchisee's rights under the Multi-Unit Development Agreement expire. At that point, Crave and its affiliates regain the right to operate or grant franchises to others within the Development Area. This is only subject to the territorial rights under the franchisee's existing franchise agreements and any right of first refusal to develop additional Franchised Businesses.
These stipulations highlight the importance of careful planning and execution for multi-unit developers. Prospective Crave franchisees should thoroughly assess their ability to meet the Minimum Performance Schedule before entering into a Multi-Unit Development Agreement. Failing to do so could lead to a loss of territorial rights and potential termination of the agreement, significantly impacting the franchisee's investment and growth potential.