What is the Crave franchisee's obligation to pay initial franchise fees?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
ling and financially able to assume the franchisor's obligations under the Franchise Agreement.
- The following is added to the end of the "Summary" sections of Item 17(v), titled "Choice of forum", and Item 17(w), titled "Choice of law":
The foregoing choice of law should not be considered a waiver of any right conferred upon the franchisor or upon the franchisee by Article 33 of the General Business Law of the State of New York.
The parties hereto have duly executed, sealed, and delivered this Addendum dated FRANCHISOR: CRAVE FRANCHISING, LLC PRINCIPALS: 85 CRAVE FDD 2025 A
ADDENDUM TO THE DISCLOSURE DOCUMENT, FRANCHISE AGREEMENT, AND MULTI-UNIT DEVELOPMENT AGREEMENT REQUIRED BY THE STATE OF SOUTH DAKOTA
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.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, the timing of initial franchise fee payments can vary depending on the state where the franchise is located. 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 met and the business is open and operating. However, the Franchise Agreement must be executed before site selection or training begins.
Similarly, in Virginia, the Virginia State Corporation Commission requires Crave to defer payment of the initial franchise fee and other initial payments until Crave has completed its pre-opening obligations under the franchise agreement.
In Maryland, due to Crave's financial condition, the Maryland Securities Commissioner requires a financial assurance. Therefore, all initial fees and payments owed by franchisees are deferred until Crave completes its pre-opening obligations under the franchise agreement. This deferral also applies to development fees and initial payments by area developers, which are deferred until the first franchise under the development agreement opens.
It is important for prospective Crave franchisees to understand the specific regulations and addenda applicable to their state, as these can significantly impact the timing of initial fee payments and other obligations.