Must a Crave franchisee satisfy all trade accounts before transferring their interest in the Franchised Business?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
replacing, upgrading or otherwise dealing with such assets as required or permitted by this Agreement), without our prior written consent. Any purported assignment or transfer, by operation of law or otherwise, made in violation of this Agreement shall be null and void and shall constitute a material event of default under this Agreement.
14.2.2 If you wish to transfer all or part of your interest in the Franchised Business, any of the Franchised Business' material assets (except as provided in Section 14.2.1 above) or this Agreement,
or if you or a Principal wishes to transfer or permit a transfer of any ownership interest in you, then in each such case (any or all of which are referred to in this Article 14 as a "Restricted Transfer"), transferor and the proposed transferee shall apply to us for our consent. We shall not unreasonably withhold our consent to a Restricted Transfer. We may, in our sole discretion, require any or all of the following as conditions of our approval:
- (a) All of the accrued monetary obligations of you or any of your affiliates and all other outstanding obligations to us arising under this Agreement or any other agreement shall have been satisfied in a timely manner and you shall have satisfied all trade accounts and other debts, of whatever nature or kind, in a timely manner;
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, a franchisee must satisfy all trade accounts and other debts before transferring their interest in the Franchised Business. Specifically, if a franchisee wishes to transfer all or part of their interest in the Franchised Business, any of the Franchised Business' material assets, or the Franchise Agreement itself, they must first apply to Crave for consent.
Crave may require, in its sole discretion, that the franchisee satisfy all accrued monetary obligations and other outstanding obligations to Crave, as well as all trade accounts and other debts, in a timely manner. The franchisee and their affiliates must also not be in default of any provision of the Franchise Agreement or any other agreement with Crave.
This requirement ensures that the Franchised Business is in good financial standing before a transfer occurs. It protects Crave's interests by ensuring that outstanding debts are settled and that the new franchisee is not burdened with pre-existing financial issues. For a prospective franchisee, this means understanding that any transfer of interest is contingent upon maintaining good financial standing and fulfilling all obligations to Crave and its vendors.