factual

In the context of a Crave franchise transfer, what does 'affiliates' refer to?

Crave Franchise · 2025 FDD

Answer from 2025 FDD Document

  • 4.2 Provided you are in full compliance with all the terms and conditions of this Agreement, including without limitation your development obligations described in Section 3.2 and the Minimum Performance Schedule, and you are in full compliance with all of your obligations under all franchise agreements executed pursuant to this Agreement, then during the term of this Agreement neither we nor any of our affiliates will develop or operate or grant franchises for the development or operation of Franchised Businesses within the Development Area, except the franchises that are granted to you pursuant to this Agreement and except as otherwise expressly provided in this Agreement.
  • 4.3 Upon the termination or expiration of this Agreement, we and our affiliates shall have the right to develop and operate, and to grant to others development rights and franchises to develop and operate, dedicated Crave outlets within the Development Area subject only to the territorial rights granted to you with respect to Franchised Businesses operated by you pursuant to the Franchise Agreements and subject, further, to the right of first refusal described in Section 6 below.
  • 4.4 We and our affiliates retain all rights not expressly granted to you with respect to Crave outlets, the Marks and the sale of any goods and services, anywhere in the world, including, without limitation, the right:
  • 4.4.1 to produce, offer and sell and to grant others the right to produce, offer and sell the products offered at dedicated Crave outlets and any other goods displaying the Marks or other trade and service marks through alternative distribution channels, as described below, both within and outside the Development Area, and under any terms and conditions we deem appropriate. "Alternative distribution channels" include, but are not limited to, the internet, catalog sales, grocery stores, club stores, specialty food stores, telemarketing or other direct marketing sales;
  • 4.4.2 to operate and to grant others the right to operate dedicated Crave outlets located outside the Development Area under any terms and conditions we deem appropriate and regardless of proximity to a Franchised Business;
  • 4.4.3 to operate and to grant others the right to operate dedicated Crave outlets at Non-Traditional Sites within and outside the Development Area under any terms and conditions we deem appropriate, subject to the right of first refusal described in Section 6.2; and
  • 4.4.4 to acquire and operate a business operating one or more restaurants or food service businesses located or operating in the Development Area, except that these businesses will not operate using the Proprietary Marks.

Source: Item 23 — RECEIPTS (FDD pages 63–253)

What This Means (2025 FDD)

According to Crave's 2025 Franchise Disclosure Document, the term 'affiliates' refers to entities that are related to Crave Franchising, LLC. These affiliates have certain rights, such as the ability to develop or operate Crave franchises outside of a franchisee's designated territory, even during the initial term of the agreement. They also retain rights to conduct business activities under any name and in any geographic area, regardless of proximity to a franchised business or the economic effect on that business.

Specifically, Crave and its affiliates can operate or franchise others to operate Crave businesses outside the franchisee's designated territory during the initial term. After the agreement terminates or expires, they can operate or franchise Crave businesses at any location, including within the former franchisee's designated territory. Furthermore, they can operate or franchise other types of restaurants or distribution models that are not dedicated Crave Restaurants at any location, both during and after the initial term.

This means that while a franchisee may have certain territorial protections, Crave and its affiliates retain significant freedom to operate and expand, potentially even in ways that could compete with an existing franchise. A prospective franchisee should carefully consider these provisions and understand the extent to which Crave's affiliates could impact their business.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.