Does Crave consider the business skill of the franchisee when granting rights under the franchise agreement?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
14.2.1 You understand and acknowledge that the rights and duties set forth in this Agreement are personal to you, and that we have granted rights under this Agreement in reliance on the business skill, financial capacity and personal character of you and the Principals. Accordingly, neither you nor any Principal shall sell, assign (including but not limited to by operation of law, such as an assignment under bankruptcy or insolvency laws, in connection with a merger, divorce or otherwise), transfer, convey, give away, pledge, mortgage or otherwise encumber any direct or indirect interest in you, in this Agreement, in the Franchised Business and/or any of the Franchised Business' material assets (other than in connection with replacing, upgrading or otherwise dealing with such assets as required or permitted by this Agreement), without our prior written consent. Any purported assignment or transfer, by operation of law or otherwise, made in violation of this Agreement shall be null and void and shall constitute a material event of default under this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, Crave does consider the business skills, financial capacity, and personal character of prospective franchisees when granting rights under the franchise agreement. Crave states that the rights and duties outlined in the agreement are personal to the franchisee, and the company grants these rights based on their assessment of these qualities. This suggests that Crave places importance on the franchisee's ability to manage and operate the business effectively.
This consideration is particularly relevant when a franchisee seeks to transfer their interest in the Franchised Business. Crave requires prior written consent for any transfer of interest, indicating that they want to ensure the new owner also meets their standards for business skill, financial stability, and personal character. Without this consent, any attempted transfer is considered invalid and a breach of the agreement.
For a prospective Crave franchisee, this means that their application will be evaluated not only on financial resources but also on their background and experience. Demonstrating a solid understanding of business principles and a history of responsible financial management could improve their chances of being approved. Additionally, it highlights the importance of carefully selecting a successor if the franchisee ever decides to sell the business, as the potential buyer will also be subject to Crave's approval process.