What definition does the Crave franchise agreement provide for 'permanent disability'?

According to Crave's 2025 Franchise Disclosure Document, the franchise agreement defines "permanent disability" as a mental or physical disability, impairment, or condition that is reasonably expected to prevent, or actually does prevent, the person in question from providing continuous and material supervision of the operation of the Franchised Business during the six-month period from its onset. This definition applies to both the franchisee and any of their Principals.

This definition is important because if a franchisee or one of their Principals experiences such a disability, their interest in the franchise agreement must be transferred within six months to a third party approved by Crave. Failure to do so constitutes a material default, leading to the termination of the franchise agreement. This clause ensures that the Crave franchise continues to be actively managed and operated, even in unforeseen circumstances.

In the event of death or permanent disability, Crave outlines procedures for interim management. The Franchised Business must be supervised by an interim successor manager satisfactory to Crave. Alternatively, Crave may provide interim management at a fee of 10% of the Gross Sales generated by the Franchised Business, plus all costs of travel, lodging, meals, and other expenses reasonably incurred by Crave. This arrangement remains in place until the Franchised Business is transferred to the deceased or disabled individual's lawful heirs or successors. Franchisees also agree to indemnify and hold Crave harmless from any acts performed during this interim management period.

Prospective franchisees should carefully consider this clause and its implications. It highlights the importance of having a succession plan in place and understanding the financial and operational consequences of a permanent disability. Franchisees may want to discuss with Crave what types of documentation or proof are required to demonstrate a "permanent disability" and what recourse they have if they disagree with Crave's assessment.