Does the Crave Franchise Agreement include a successor option?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
3.2.1 You shall have been, throughout the Initial Term, 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.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, the Franchise Agreement includes a successor option under certain conditions. Crave will provide the franchisee with the necessary documents for the successor term six months before the initial term expires. These documents may include a general release, the current Franchise Agreement, and other related agreements. The terms and fees in these documents will be substantially the same as those in new Franchise Agreements at the time the successor term begins.
Importantly, the franchisee will not have to pay another initial franchise fee, but will be required to pay a successor agreement fee of $5,000. The franchisee must execute and return these documents, along with the successor agreement fee, by the expiration date of the initial term. Failure to do so results in the expiration of the agreement, with no further rights granted.
After receiving the executed documents and the fee, Crave will inspect the franchised business to determine if any updates or remodeling are needed to meet the current standards for new Crave outlets. The franchisee will have six months to complete these modifications. Crave reserves the right to terminate the Successor Franchise Documents if the franchisee fails to make the required modifications. Crave also reserves the right to not grant a successor term if they decide to withdraw from the marketing area or the designated territory where the franchised business is located.
Crave can refuse to grant a successor term if the franchisee's lease is not extended to cover the successor term or if the franchisee does not have a written commitment from the landlord to renew the lease. Crave may also refuse a successor term if the franchisee fails to comply with the terms of the agreement, fails to pay amounts owed, or fails to cure any defaults incurred during the initial term.