What constitutes a material default regarding the Crave franchise agreement after the franchisee's death or permanent disability?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.5.1 The grant of rights under this Agreement is personal to you, and on the death or permanent disability of you or any of your Principals, the executor, administrator, conservator or other personal representative of yours or of the deceased Principal, as the case may be, shall be required to transfer your or your Principal's interest in this Agreement within six (6) months from the date of death or permanent disability to a third party approved by us. Failure to transfer in accordance with the forgoing will constitute a material default and the franchise granted by this Agreement will terminate. For purposes of this Agreement, the term "permanent disability" means a mental or physical disability, impairment or condition that is reasonably expected to prevent or actually does prevent such person from providing continuous and material supervision of the operation of the Franchised Business during the six (6) month period from its onset.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, a material default of the franchise agreement occurs if, upon the death or permanent disability of the franchisee or any of their principals, the interest in the agreement is not transferred to a Crave-approved third party within six months from the date of death or permanent disability.
The FDD defines "permanent disability" as a mental or physical condition that is reasonably expected to, or actually does, prevent the person from providing continuous and material supervision of the Franchised Business during the six-month period following the onset of the disability.
This provision ensures that Crave maintains control over who operates its franchises, even in unforeseen circumstances. It also places a responsibility on the franchisee's estate or representative to act quickly to find a suitable buyer and complete the transfer within the specified timeframe to avoid termination of the franchise agreement.