Does the Crave franchise agreement include future liabilities and obligations of the franchisee, even under successor terms or extensions of the agreement?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
erm, in substantial compliance, and at the expiration of such Initial Term are in full compliance, with this Agreement, your lease or sublease and all other agreements between you and us or companies or persons associated or affiliated with us.
- 3.2.2 We shall, within six (6) months before the expiration of the Initial Term, provide you with any documents that you are required to execute for the successor term, which documents may include, but are not limited to, a general release, our then-current Franchise Agreement and all other ancillary agreements, instruments and documents then customarily used by us in the granting of business franchises (all of which will contain terms and fees substantially the same as those included in Franchise Agreements being executed at the time the successor term commences, and which will not obligate you to pay a further initial franchise fee, but will require payment of a successor agreement fee equal to Five Thousand Dollars ($5,000)) (the "Successor Franchise Documents").
- 3.2.3 You shall execute the Successor Franchise Documents and all other documents and instruments that we require in order to enter into a successor Franchise Agreement. You shall return the executed Successor Franchise Documents to us, together with payment of our then-current successor agreement fee, by no later than the expiration date of the Initial Term. If we do not receive the executed documents and successor agreement fee by such expiration date, then this Agreement shall expire, you shall have no further rights under this Agreement, and you shall comply with the provisions of Article 18 and any other provisions that survive termination or expiration of this Agreement.
- 3.2.4 After we have received from you all executed Successor Franchise Documents and the successor agreement fee, we shall inspect your Franchised Business to determine the extent of any required updating, remodeling, redecorating or other refurbishment for the Franchised Business in order to bring the Franchised Business up to our then-current image and standards for new Crave outlets. We will provide notice to you of the modifications you shall be required to make, and you shall have six (6) months from the date of such notice to effectuate such modifications. If you fail or refuse to make the required modifications, we shall have the right to terminate the Successor Franchise Documents.
- 3.2.5 Notwithstanding anything herein to the contrary, we reserve the right not to enter into a successor franchise agreement for your franchise as a result of a decision to withdraw from a marketing area or the Designated Territory in which your Franchised Business is located.
3.3 Refusal to Grant Successor Term
We can refuse to grant a successor term for your franchise if your lease, sublease or other document by which you have the right to occupy the Accepted Location is not extended to cover the period of the successor term before your successor term is to take effect or if you do not have a written commitment from your landlord to renew the lease or sublease for a period at least equal to the successor term. We may also refuse to grant you a successor term for your franchise under other circumstances, including, but not limited to, your failure to substantially comply with the terms of this Agreement, your failure to pay amounts owed to us or our affiliates when due, or your failure to cure of any defaults incurred during the Initial Term, if applicable.
3.4 Successor Term Under Law
Even though we decline to grant you a successor term for your franchise, it is possible that we can be required to grant you a successor term under a law, rule, regulation, statute, ordinance, or legal order that is applicable at the time. If that happens, to the extent it is allowed by the concerned law, rule, regulation, statute, ordinance or order, your successor term will be subject to the conditions of the Franchise Agreement we are using for new franchisees at the time the successor period begins. If we are not then offering new franchises, your successor period will be subject to the terms in the Franchise Agreement that we indicate.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, the franchise agreement does include future liabilities and obligations for the franchisee, especially concerning successor terms. To obtain a successor franchise agreement, a franchisee must be in full compliance with the original agreement, lease, and all other agreements with Crave or its affiliates.
The franchisee is required to execute successor franchise documents, which may include a general release and Crave's then-current franchise agreement. These documents will contain terms and fees substantially similar to those in new franchise agreements at the time the successor term commences. While there is no additional initial franchise fee, a successor agreement fee of $5,000 is required.
The franchisee must also update, remodel, redecorate, or refurbish the franchised business to meet Crave's current image and standards for new outlets. Failure to make these required modifications can result in the termination of the successor franchise documents. Crave also reserves the right not to enter into a successor agreement if they decide to withdraw from the marketing area or the designated territory where the franchised business is located.
Furthermore, the franchisee acknowledges an obligation to indemnify Crave's officers, directors, and employees from any claims, losses, costs, expenses, liabilities, compliance costs, and damages related to the franchisee's compliance with the Americans with Disabilities Act. This obligation extends to the costs, including attorneys' fees, associated with such claims.