What is the deadline for closing the purchase of a Crave franchised business after Crave provides notice of exercising its purchase option?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
14.8.3 The purchase price shall be paid in cash, a cash equivalent, or marketable securities of equal value at the closing of the purchase, which shall take place no later than ninety (90) days after receipt by you of our notice of exercise of this option to purchase. At that time you shall deliver instruments transferring to us or our assignee: (a) good and merchantable title to the assets purchased free and clear of all liens and encumbrances, other than liens and security interests acceptable to us or our assignee, with all sales and other transfer taxes paid by you; (b) all licenses and permits of the Franchised Business which may be assigned or transferred; and (c) the lease or sublease for the Accepted Location. In the event that you cannot deliver clear title to all of the purchased assets as aforesaid or in the event there shall be other unresolved issues, the closing of the sale shall be accomplished through an escrow. Prior to closing, you and we shall comply with all applicable legal requirements including the bulk sales provisions of the Uniform Commercial Code of the state in which the Franchised Business is located.
14.8.4 We shall have the right to set off against, and reduce the purchase price by, any and all amounts owed by you to us or our affiliates and the amount of any encumbrances or liens against the assets or any obligations assumed by us. If we or our assignee exercise this option to purchase, we shall have the right to appoint a General Manager to maintain the operation of the Franchised Business pending the closing of such purchase. Alternatively, we may require you to close the Franchised Business during such time period without removing any assets from the Accepted Location. You shall maintain in force all insurance policies required pursuant to this Agreement until the date of closing. If the Accepted Location is leased, we agree to use reasonable efforts to effect a termination of the existing lease for the Accepted Location and enter into a new lease on reasonable terms with the landlord. In the event we are unable to enter into a new lease, we will indemnify and hold you harmless from any ongoing liability under the lease from the date we assume possession of the Accepted Location.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, if Crave exercises its option to purchase a franchised business, the closing of the purchase must occur no later than ninety (90) days after the franchisee receives Crave's notice of exercise. At closing, the franchisee must deliver instruments transferring good and merchantable title to the assets purchased, free of liens (unless acceptable to Crave), along with transferable licenses and permits, and the lease or sublease for the location. The franchisee is also responsible for paying all sales and transfer taxes.
However, the FDD also states that if the franchisee cannot deliver clear title to all purchased assets or if there are other unresolved issues, the closing of the sale will be managed through an escrow account. Prior to the closing, both Crave and the franchisee must comply with all applicable legal requirements, including the bulk sales provisions of the Uniform Commercial Code in the state where the franchised business is located.
Crave retains the right to offset and reduce the purchase price by any amounts the franchisee owes to Crave or its affiliates, as well as the amount of any encumbrances or liens against the assets or any obligations assumed by Crave. After Crave exercises its purchase option, it has the right to appoint a General Manager to oversee the operation of the franchised business pending the closing, or Crave may require the franchisee to close the business without removing any assets from the location. The franchisee must maintain all required insurance policies until the closing date. If the location is leased, Crave will attempt to terminate the existing lease and enter into a new lease with the landlord on reasonable terms. If Crave cannot secure a new lease, it will indemnify the franchisee from any ongoing liability under the lease from the date Crave takes possession of the location.