In the event of the Crave franchisee's permanent disability, what level of supervision must the franchisee be unable to provide?
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 franchisee's "permanent disability" is defined as a mental or physical condition that prevents them from providing continuous and material supervision of the Franchised Business. This definition is important because it triggers certain requirements regarding the transfer of the franchise.
Specifically, if a franchisee 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, potentially leading to termination of the franchise agreement. During this six-month period, an interim successor manager, satisfactory to Crave, must supervise the Franchised Business. Alternatively, Crave may provide interim management, charging a fee equal to 10% of the Gross Sales, plus all associated costs.
This clause protects Crave by ensuring that the Franchised Business continues to operate under appropriate supervision even if the franchisee is unable to manage it. For a prospective franchisee, this means understanding that their ability to actively manage the business is a condition of maintaining the franchise. They should also be aware of the financial implications of either needing to find an interim manager or potentially paying Crave a percentage of gross sales for interim management.