What are some examples of curable defaults that could lead to termination of a Crave franchise?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Multi- | Summary | |
|---|---|---|---|
| Unit Development Agreement | |||
| h. “Cause” defined – non- curable defaults | 9 | Failure to meet your minimum performance schedule; failure to comply with applicable laws; if all of your Franchised Businesses stop operating; unauthorized transfer; you make a material misrepresentation to us; conviction by you or your owners of an indictable offense; bankruptcy or insolvency; if a Franchise Agreement with us is terminated according to its terms (this is a cross-default provision) | |
| i. Multi-unit developer’s | 10 | You must stop selecting sites for Franchised | |
| obligations on termination/ | Businesses, and you may not open any more | ||
| non-renewal | Franchised Businesses | ||
| j. Assignment of contract by franchisor | 11 | No restriction on our right to assign. However, no assignment will be made except to an assignee who, in our good faith judgment, is willing and able to assume our obligations under the Multi-Unit Development Agreement. | |
| k. “Transfer” by multi-unit | 11 | Includes transfer of any interest in the Multi- | |
| developer – defined | Unit Development Agreement | ||
| l. Franchisor approval of transfer by multi-unit developer | 11 | We have the right to approve all transfers, our consent not to be unreasonably withheld | |
| m. Conditions for franchisor approval of transfer | 11 | Conditions for transfer include not being in default, at least 25% of all Franchised Businesses required to be developed are open or under construction, all debts are paid, the buyer meets our current criteria for new Multi- Unit Developers, execution of a general release, payment of transfer fee, buyer personally guarantees all obligations | |
| n. Franchisor’s right of first | 11 | We have the right to match the offer. | |
| refusal to acquire multi- | |||
| unit developer’s business | |||
| o. Franchisor’s option to | Not applicable | Not applicable | |
| purchase multi-unit | |||
| developer’s business | |||
| p. Death or disability of multi-unit developer | 11 | The rights granted under the Multi-Unit Development Agreement will terminate upon your death or permanent disability, unless transferred to a third-party approved by us within six months. | |
| Provision | Section in Franchise Agreement | Summary your original contract, but the boundaries of your territory will remain the same, and the fees in the successor agreement will not be greater than the fees that we then impose on similarly situated franchisees with successor agreements. | |
| d. | Termination by franchisee | Not applicable | You may seek termination upon any grounds available by state law. |
| e. | Termination by franchisor without cause | Not applicable | The Franchise Agreement will terminate upon your death or permanent disability and the Franchised Business must be transferred withing six months to a replacement franchisee that we approve. |
| f. | Termination by franchisor with cause | Section 17.1.1 | Each of your obligations under the Franchise Agreement is a material and essential obligation, the breach of which may result in termination. |
| g. | "Cause" defined – curable defaults | Sections 17.1.3 and 17.2 | We may terminate you for cause if you fail to cure certain defaults, including: suspension of your beer and wine license; if you or any of your affiliates fail to pay any monies owed to us, or our affiliates or vendors, and do not cure within five days after notice (or longer period required); fail to obtain signed copies of the confidentiality and non-competition covenants contained in the Franchise Agreement within five days after a request; fail to obtain and maintain required insurance within seven days after notice; fail to cure a failed quality assurance audit within 15 days after notice; suspension of required license or permit; use the Marks in an unauthorized manner and fail to cure within 24 hours after notice; fail to maintain quality standards; fail to cure any other default that is susceptible of cure within 30 days after notice |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 50–56)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, there are several curable defaults that could lead to the termination of a franchise agreement. These include suspension of a franchisee's beer and wine license, failing to pay monies owed to Crave, its affiliates, or vendors, and not curing the failure within five days after notice.
Additional curable defaults include failing to obtain signed copies of confidentiality and non-competition covenants within five days of a request, failing to maintain required insurance within seven days after notice, and failing to cure a failed quality assurance audit within 15 days after notice. Suspension of a required license or permit also constitutes a curable default.
Furthermore, using Crave's marks in an unauthorized manner without curing the issue within 24 hours after notice, failing to maintain quality standards, and failing to cure any other default that is susceptible to cure within 30 days after notice are also considered curable defaults that could lead to termination.