What is the Crave franchisee's obligation to open the Franchised Business?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
ARTICLE 2 SITE SELECTION, PLANS AND CONSTRUCTION
2.1 Your Responsibility to Locate a Site
- 7.9 In no event shall any Franchised Business be opened for business unless and until a Franchise Agreement for such Franchised Business has been fully executed and the initial franchise fee for such Franchised Business has been fully paid.
SECTION 8 OUR SERVICES
We shall, at our expense, provide the following services:
8.1 Review your site selection for conformity to our standards and criteria for selection and acquisition of sites upon our receipt of your written request for approval thereof.
- 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.
In the State of South Dakota, we will defer the payment of the initial franchise fee, development fee, and any other initial payment until all of our material pre-opening obligations have been satisfied and until you open your business and it is operating. However, you must execute the Franchise Agreement prior to looking for a site or beginning training.
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- The Virginia State Corporation Commission's Division of Securities and Retail Franchising requires us to defer payment of the initial franchise fee and other initial payments owed by the franchisees to the franchisor until the franchisor has completed its pre-opening obligations under the franchise agreement.
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- No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
The 2025 Crave Franchise Disclosure Document states that the franchisee is responsible for locating a site for the Franchised Business. Crave must review the franchisee's site selection to ensure it conforms to Crave's standards and criteria.
According to the FDD, a Crave franchise cannot be opened for business until a Franchise Agreement has been fully executed and the initial franchise fee has been fully paid. The franchisee also has sole responsibility for all obligations arising from the operation of their business, including the payment of all applicable taxes.
In South Dakota, Crave defers the payment of the initial franchise fee, development fee, and any other initial payment until all material pre-opening obligations have been satisfied and the business is open and operating. However, the franchisee must execute the Franchise Agreement before looking for a site or beginning training.
In Virginia, the franchisor must complete its pre-opening obligations before receiving initial payments. Additionally, Virginia law protects franchisees from waiving claims under state franchise law or disclaiming reliance on statements made by the franchisor.