What is the financial threshold for meeting the Minimum Performance Schedule for Crave?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
in connection with the System (hereinafter referred to as "Marks" or "Proprietary Marks");
WHEREAS, we and our affiliate continue to develop, use and control the use of such Marks in order to identify for the public the source of services and products marketed thereunder and under the System, and to represent the System's high standards of quality, appearance and service; and
WHEREAS, you wish to obtain certain development rights to open and operate Franchised Businesses operating under the Marks and the System within the Development Area described in this Agreement.
NOW, THEREFORE, the parties, in consideration of the undertakings and commitments of each party to the other party stated herein, hereby agree as follows:
SECTION 1 GRANT
1.1 We hereby grant to you, pursuant to the terms and conditions of this Agreement, certain development rights ("Development Rights") to establish and operate the number of Franchised Businesses granted in the Minimum Performance Schedule (defined below), and to use the Marks and System solely in connection therewith, at specific locations to be designated in separate Franchise Agreements executed as provided in Section 3.1 hereof, and pursuant to the schedule established in Attachment 1 of this Agreement (hereinafter "Minimum Performance Schedule"). Each Franchised Business developed
hereunder shall be located in the area described in Attachment 2 of this Agreement (hereinafter "Development Area"). The Minimum Performance Schedule shall be deemed completed, and this Agreement shall expire, upon the opening of the Franchised Business to be developed hereunder.
- 1.2 Each Franchised Business for which a Development Right is granted hereunder shall be established and operated pursuant to a Franchise Agreement to be entered into between you and us in accordance with Section 3.1 hereof.
- 1.3 Except as otherwise provided in this Agreement, we shall not establish, nor franchise anyone other than you to establish, a dedicated Crave outlet in the Development Area during the term of this Agreement, provided you are not in default hereunder.
- 1.4 This Agreement is not a Franchise Agreement and does not grant to you any right to use the Marks or System.
- 1.5 You shall have no right under this Agreement to franchise others under the Marks or System.
SECTION 2 DEVELOPMENT FEE; INITIAL FRANCHISE FEES
- 2.1 In consideration of the Development Rights granted herein, you shall pay to us a development fee of ___________________________ Thousand Dollars ($____________), payable upon execution of this Agreement ("Development Fee"). The Development Fee is calculated as one hundred percent (100%) of the initial franchise fee for the first Franchised Business to be developed hereunder, plus a deposit equal to fifty percent (50%) of the initial franchise fee for each additional Franchised Business to be developed hereunder.
- 2.2 The Development Fee shall be fully earned by us upon execution of this Agreement, is not refundable, and will not be credited against any other fees you may pay to us pursuant to this Agreement or any Franchise Agreement.
- 2.3 The initial franchise fee payable for each Franchised Business to be developed hereunder shall be as follows:
- 2.3.1 For Restaurant outlets, the initial franchise fee shall be: Forty-Five Thousand Dollars ($45,000) for the first Restaurant, Forty Thousand Dollars ($40,000) for the second and third Restaurants, and Thirty Five Thousand Dollars ($35,000), for the fourth and each additional Restaurant.
- 2.3.2 For each Food Truck outlet, the initial franchise fee shall be Thirty Thousand Dollars ($30,000).
- 2.4 The initial franchise fee for the first Franchised Business has been paid in full in the Development Fee. 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.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Crave requires multi-unit developers to adhere to a Minimum Performance Schedule, which is outlined in Attachment 1 of the Multi-Unit Development Agreement. This schedule mandates the establishment and operation of a specific number of Crave outlets within a designated Development Area, as detailed in Attachment 2. The agreement stipulates that the Minimum Performance Schedule is deemed complete once the final Franchised Business is opened as per the agreement.
To maintain development rights, the multi-unit developer must comply with all terms and conditions of the agreement, including the Minimum Performance Schedule. Failure to meet this schedule can result in the termination or expiration of the agreement, allowing Crave to develop or franchise others within the Development Area. However, Crave's obligation to act diligently on any request or approval from the developer, and any material delay caused by Crave's failure to do so, will not constitute a default by the developer.
The agreement also addresses circumstances beyond the developer's control, such as Force Majeure events like natural disasters or acts of war, which may excuse a failure or delay in performance. However, lack of financing is explicitly excluded from the definition of Force Majeure. The timely development of Franchised Businesses in accordance with the Minimum Performance Schedule is considered of material importance to both Crave and the developer, and continued operation of these businesses is a condition for maintaining the rights granted under the agreement.
While the FDD mentions the importance of adhering to the Minimum Performance Schedule, it does not specify a particular financial threshold that must be met. Instead, it focuses on the timely development and continuous operation of the Franchised Businesses. A prospective franchisee should seek clarification from Crave regarding any specific financial benchmarks or requirements associated with the Minimum Performance Schedule to fully understand their obligations and potential risks.