When executing the Development Agreement, what must a Crave franchisee do regarding the Franchise Agreement for the first Franchised Business?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
You shall execute the Franchise Agreement for the first Franchised Business contemporaneously with your execution of this Agreement and a portion of the Development Fee will be used to satisfy the initial franchise fee for such first Franchised Business in full.
For each additional Franchised Business developed hereunder, we will apply a credit of fifty percent (50%) of the amount of the initial franchise fee toward the amount of the initial franchise fee due for such Franchised Business.
The balance of the initial franchise fee is payable to us in a lump sum upon execution of the Franchise Agreement for that Franchised Business.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, when a franchisee signs the Development Agreement, they must also execute the Franchise Agreement for their first Crave Franchised Business. A portion of the development fee will be used to cover the initial franchise fee for this first location in full.
For each additional Crave location developed under the agreement, the franchisee will receive a credit equal to fifty percent (50%) of the initial franchise fee amount. The remaining balance of the initial franchise fee must be paid in a lump sum when the Franchise Agreement for that specific location is executed.
This concurrent execution ensures that the franchisee is committed to opening their first location as part of the development plan. It also clarifies the payment structure for the initial franchise fees, outlining how the development fee contributes to the first franchise and how subsequent franchise fees are handled.