Are the fees described in Item 6 of the Crave FDD refundable?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
All fees described in this Item 6 are non-refundable and are uniformly imposed. Except as otherwise indicated in the preceding chart, we impose all fees and expenses listed and you must pay them to us. Except as specifically stated above, the amounts given may be due to changes in market conditions, our cost of providing services and future policy changes. At the present time we have no plans to increase payments over which we have control, but as noted in the chart above and in these notes, we have the right to increase certain fees upon notice to you.
Source: Item 6 — OTHER FEES (FDD pages 12–19)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, the fees outlined in Item 6, which covers various payments beyond the initial franchise fee and ongoing royalties, are generally non-refundable. Specifically, Note 1 in Item 6 states that all fees described in that item are non-refundable and are uniformly imposed. This means that once a franchisee pays any of the fees listed, such as the royalty fee, brand development fee, charges for mystery shopper evaluations, or other technology and service-related fees, they cannot expect to receive a refund under normal circumstances.
This non-refundable policy has significant implications for prospective Crave franchisees. It underscores the importance of carefully evaluating the various fees and their potential impact on the business's financial performance. Franchisees need to factor these non-refundable costs into their financial projections and ensure they have sufficient capital to cover these expenses. Understanding that these fees are uniformly imposed also suggests that Crave applies these charges consistently across all franchisees, which can provide some assurance of fairness.
While the FDD clearly states that the fees in Item 6 are non-refundable, it also mentions that some fees may be subject to change due to market conditions, the cost of providing services, or future policy changes. Although Crave states they have no current plans to increase payments, they retain the right to do so with notice. This highlights the need for franchisees to stay informed about any potential fee adjustments and to understand the factors that could influence these changes. Franchisees should maintain open communication with Crave to remain aware of any upcoming modifications to the fee structure.
In the franchise industry, it is common for certain fees, such as initial franchise fees, to be non-refundable, as they cover the franchisor's costs associated with granting the franchise. However, the non-refundability of ongoing fees, like royalty fees or marketing contributions, can vary. Prospective franchisees should carefully review the FDD and seek clarification from the franchisor regarding the specific circumstances under which any fees might be refundable or adjustable. Understanding the full financial obligations and the franchisor's policies on refunds is crucial for making an informed investment decision.