What is the estimated range for the additional funds needed for a Crave franchise for the first 3 months of operation?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
| (1) | Type of Expenditure | (2) | Amount | (3) | Method of Payment | (4) | When Due | (5) | To Whom Payment is to be Made | | Additional Funds – 3 Months (16) | $5,000 to $15,000 | As arranged | As arranged | You Determine | | Total (17) | $266,300 to $343,550 | | | |
| (1) Type of Expenditure | (2) Amount | (3) Method of Payment | (4) When Due | (5) To Whom Payment is to be Made |
|---|---|---|---|---|
| Training Expenses | $500 to $1,500 | As arranged | As arranged | Airline, Hotel, |
| (13) | Restaurant, etc. | |||
| Grand Opening | $5,000 | As arranged | When Premises | |
| Marketing (14) | Lease Signed | Us | ||
| Additional Funds – | $15,000 to $30,000 | As arranged | As arranged | You Determine |
| 3 Months (16) |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 19–26)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, franchisees will need additional funds to cover expenses during the first three months of operation. These funds are meant to support ongoing costs like payroll, utilities, rent, Royalty Fees, brand development and advertising fees, and other start-up fees if sales revenue doesn't cover them. The estimated range for these additional funds is $5,000 to $15,000 for a Restaurant or Express Restaurant and $15,000 to $30,000 for a Food Truck.
Crave based these figures on the principals' experience in opening and operating restaurants and food truck businesses since 2007. The FDD notes that new businesses often generate a negative cash flow, so having sufficient capital is crucial. However, the estimate does not include any potential sales revenue the franchisee might generate, nor does it include debt service.
It's important to note that these figures are only estimates, and Crave does not guarantee that additional working capital won't be necessary during or after the start-up phase. The amount needed can vary based on factors like the franchisee's management skills, local economic conditions, and unforeseen expenses. Prospective franchisees should carefully consider their financial situation and local market conditions to determine if they have sufficient capital to sustain the business during the initial months.
Given the variability, it would be prudent for prospective Crave franchisees to prepare a detailed business plan with realistic revenue projections and expense budgets. They should also consider consulting with financial advisors to assess their capital needs and explore financing options if necessary. Understanding the potential for negative cash flow and having a financial cushion can help franchisees navigate the initial challenges of starting a new business.