Does the Crave franchise agreement allow for assignment by operation of law, such as under bankruptcy or insolvency laws, without prior written consent?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
14.2.1 You understand and acknowledge that the rights and duties set forth in this Agreement are personal to you, and that we have granted rights under this Agreement in reliance on the business skill, financial capacity and personal character of you and the Principals. Accordingly, neither you nor any Principal shall sell, assign (including but not limited to by operation of law, such as an assignment under bankruptcy or insolvency laws, in connection with a merger, divorce or otherwise), transfer, convey, give away, pledge, mortgage or otherwise encumber any direct or indirect interest in you, in this Agreement, in the Franchised Business and/or any of the Franchised Business' material assets (other than in connection with replacing, upgrading or otherwise dealing with such assets as required or permitted by this Agreement), without our prior written consent. Any purported assignment or transfer, by operation of law or otherwise, made in violation of this Agreement shall be null and void and shall constitute a material event of default under this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, franchisees are restricted from assigning their rights and duties under the franchise agreement, including through operation of law such as bankruptcy or insolvency, without the prior written consent of Crave.
Specifically, the FDD states that the rights and duties outlined in the agreement are personal to the franchisee, and Crave has granted these rights based on the franchisee's business skills, financial capacity, and personal character. Therefore, any attempt to sell, assign, transfer, or encumber any direct or indirect interest in the franchisee, the agreement, or the franchised business's assets without Crave's prior written consent is prohibited.
Any assignment or transfer, whether by operation of law or otherwise, that violates the terms of the franchise agreement will be considered null and void. Furthermore, such unauthorized action will constitute a material event of default under the agreement, potentially leading to termination of the franchise. This provision underscores Crave's control over who operates a franchise and ensures that any transfer meets their standards.