For a Crave franchise, who benefits from the goodwill arising from the franchisee's use of the Marks and the System?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
- 9.2.3 You understand and agree that the limited license to use the Marks granted hereby applies only to such Marks as are designated by us, and which are not subsequently designated by us as being withdrawn from use, together with those which may hereafter be designated by us in writing. You expressly understand and agree that you are bound not to represent in any manner that you have acquired any ownership or equitable rights in any of the Marks by virtue of the limited license granted hereunder, or by virtue of your use of any of the Marks.
- 9.2.4 You understand and agree that any and all goodwill arising from your use of the Marks and the System shall inure solely and exclusively to our benefit, and upon expiration or termination of this Agreement and the license herein granted, no monetary amount shall be assigned as attributable to any goodwill associated with your use of the Marks.
- 9.2.5 You shall not contest the validity of or our interest in the Marks or assist others to contest the validity of or our interest in the Marks.
- 9.2.6 You acknowledge that any unauthorized use of the Marks shall constitute an infringement of our rights in the Marks and a material event of default hereunder. You agree that you shall provide us with all assignments, affidavits, documents, information and assistance we reasonably request to fully vest in us all such rights, title and interest in and to the Marks, including all such items as are reasonably requested by us to register, maintain and enforce such rights in the Marks.
- 9.2.7 If it becomes advisable at any time, in our discretion, to modify or discontinue use of any Mark and/or to adopt or use one or more additional or substitute proprietary marks, then you shall be obligated to comply with any such instruction by us. We shall not have any obligation in such event to reimburse you for your documented expenses of compliance. You waive any other claim arising from or relating to any Mark change, modification or substitution. We will not be liable to you for any expenses, losses or damages sustained by you as a result of any Mark addition, modification, substitution or discontinuation. You covenant not to commence or join in any litigation or other proceeding against us for any of these expenses, losses or damages.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, any goodwill that arises from a franchisee's use of Crave's marks and systems exclusively benefits Crave. This means that as a franchisee operates their business and builds a positive reputation using Crave's brand, the value generated by that reputation accrues solely to Crave.
This has significant implications for a prospective franchisee. Upon the expiration or termination of the franchise agreement, the franchisee will not be entitled to any monetary compensation for the goodwill they helped create during the term of their agreement. This is a standard practice in franchising, as the brand and system are owned by the franchisor, and the franchisee is essentially licensing the right to use them.
Crave franchisees are explicitly prohibited from claiming any ownership or equitable rights in the marks. They also cannot contest the validity of Crave's interest in the marks. This underscores the franchisor's control over the brand and its associated goodwill. Crave also retains the right to modify or discontinue the use of any mark, and franchisees must comply without any obligation for reimbursement of expenses from Crave.
Therefore, while franchisees benefit from using a recognized brand and established system, they do not build equity in the brand itself. The goodwill generated remains the sole property of Crave, which can impact the franchisee's potential return on investment when they exit the business.