What are some examples of curable defaults that could lead to termination of the Crave Multi-Unit Development Agreement?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Multi Unit Development Agreement | Summary | |
|---|---|---|---|
| a. | Length of the franchise term | 6 | Length of the Minimum Performance Schedule |
| b. | Renewal or extension of the term | 5 | After all Franchised Businesses have been developed, we will negotiate in good faith another Multi-Unit Development Agreement. |
| c. | Requirements for multi unit developer to renew or extend | Not applicable | Not applicable |
| d. | Termination by multi-unit developer | Not applicable | You may seek to terminate on any grounds available to you at law. |
| e. | Termination by franchisor without cause | Not applicable | Not applicable |
| f. | Termination by franchisor with cause | 9 | We can terminate if you commit any one of several listed violations. |
| g. | "Cause" defined – curable defaults | 9 | If you use the Marks or System without our consent; participating in a competing business; failure to pay money to us when due; you begin developing a Franchised Business before all of your pre-development obligations are met; failure to obtain our consent when required; you open or begin operating any Franchised Business before a Franchise Agreement for that Franchised Business has been signed |
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 the Multi-Unit Development Agreement. These include using Crave's trademarks or system without consent, participating in a competing business, failing to pay money owed to Crave when due, starting the development of a franchised business before meeting all pre-development obligations, failing to obtain Crave's consent when required, and opening or operating a franchised business before a Franchise Agreement has been signed for that business. If a multi-unit developer commits any of these violations, Crave has grounds for termination, provided the developer fails to cure the default within the specified timeframe.
These stipulations are important for prospective Crave multi-unit developers to understand, as they highlight the areas where compliance is critical to maintaining the agreement. The ability to 'cure' a default means the developer has an opportunity to correct the issue and avoid termination, but it also places the onus on the developer to act swiftly and decisively upon receiving notice of the default. The specific cure periods are not outlined in this section, but it is important to note that the cure period can vary depending on the nature of the default.
It is fairly standard in franchising for agreements to include provisions allowing the franchisor to terminate the agreement if the franchisee fails to meet certain obligations. The inclusion of curable defaults is generally seen as a more balanced approach, as it gives the franchisee a chance to rectify the situation before facing termination. However, the specific defaults listed and the cure periods allowed can vary significantly between franchise systems.
Prospective Crave multi-unit developers should carefully review the Multi-Unit Development Agreement to fully understand their obligations and the potential consequences of failing to meet them. They should also pay close attention to the cure periods allowed for each type of default, as these can be critical in avoiding termination. It would be prudent to seek legal counsel to fully understand the implications of these provisions before entering into the agreement.