What is the Crave franchisee prohibited from doing with the Marks or System under the Development Agreement?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
You acknowledge and agree that:
7.1 Except as otherwise provided herein, this Agreement includes only the right to select sites for the establishment of Franchised Businesses and to submit the same to us for our approval in accordance with the terms of this Agreement. This Agreement does not include the grant of a license by us to you of any rights to use the Marks, the System, or to open or operate any Franchised Businesses within the Development Area. You shall obtain the license to use such additional rights at each Franchised Business upon the execution of each Franchise Agreement by both you and us and only in accordance with the terms of each Franchise Agreement.
7.2 The Development Rights granted hereunder are personal to you and cannot be sold, assigned, transferred or encumbered, in whole or in part, except as stated in Section 11 hereof.
7.3 Except as provided in Section 6 hereof, the Development Rights granted hereunder are non-exclusive, and we retain the right, in our sole discretion:
7.3.1 To continue to construct and operate other dedicated Crave outlets and to use the System and the Marks at any location outside the Development Area, and to license others to do so.
7.3.2 To develop, use and franchise the rights to any trade names, trademarks, service marks, trade symbols, emblems, signs, slogans, insignia, or copyrights not designated by us as Marks for use with different franchise systems for the sale of the different products or services not in connection with the System at any location, on such terms and conditions as we may deem advisable and without granting you any rights therein.
7.3.3 To develop, merchandise, sell and license others to sell any of our products, proprietary or otherwise, presently existing or to be developed in the future, to the public through alternative distribution channels outside or inside of the Development Area and to use the Marks in connection therewith.
7.4 You have sole responsibility for the performance of all obligations arising out of the operation of your business pursuant to this Agreement, including, but not limited to, the payment when due of any and all taxes levied or assessed by reason of such operation.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, the Development Agreement grants the franchisee the right to select sites for Franchised Businesses, but it does not include the right to use the Marks or the System. The franchisee only obtains the license to use these rights upon the execution of each Franchise Agreement.
Specifically, the franchisee cannot sell, assign, transfer, or encumber the Development Rights, except as outlined in Section 11 of the agreement. Crave retains the right to use the System and Marks outside the Development Area and to develop other franchise systems with different marks for different products or services. They can also sell their products through alternative distribution channels using the Marks.
Furthermore, the franchisee is responsible for all obligations arising from their business operation, including taxes. Upon termination or expiration of the Development Agreement, Crave has the right to develop and operate Crave outlets within the Development Area, subject to any territorial rights granted in the Franchise Agreements and the right of first refusal.