Will a Crave franchisee receive compensation for sales made by Crave through alternative distribution channels?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
We and our affiliates may sell products under the Marks within and outside your Designated Territory through any method of distribution other than a Crave Restaurant or Food Truck, including sales through channels of distribution such as the internet, catalog sales, grocery stores, club stores, specialty food stores, telemarketing or other direct marketing sales (together, "alternative distribution channels"). You may not use alternative distribution channels to make sales outside or inside your Designated Territory and you will not receive any compensation for our sales through alternative distribution channels.
We or our affiliate will fulfill all orders placed through the retail portion of our website and you will not be entitled to any portion of the profits received from this, even if the customer's order is generated from or delivered to an address in your Designated Territory.
Source: Item 12 — TERRITORY (FDD pages 42–46)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, franchisees will not receive compensation for sales the company makes through alternative distribution channels. Crave and its affiliates retain the right to sell products under the brand's trademarks both within and outside a franchisee's designated territory through various methods, including internet sales, catalog sales, grocery stores, club stores, specialty food stores, telemarketing, and other direct marketing sales. These are collectively referred to as "alternative distribution channels."
Specifically, Crave states that franchisees are not allowed to use these alternative distribution channels to make sales, whether inside or outside their designated territory. Furthermore, the FDD clearly states that franchisees will not receive any compensation for sales that Crave makes through these alternative distribution channels. This includes orders placed through the retail portion of Crave's website, even if the customer's order originates from or is delivered to an address within the franchisee's designated territory. Crave or its affiliate will fulfill all such orders and retain the profits.
This policy has significant implications for prospective Crave franchisees. It means that while franchisees operate their restaurants or food trucks, Crave can simultaneously sell products through other channels without sharing any of the revenue with the franchisee. This could potentially create competition between the franchisee's business and Crave's other sales channels, especially online sales. Franchisees should carefully consider this aspect and evaluate the potential impact on their profitability, especially in the context of increasing e-commerce and direct marketing trends.