What happens to the Crave Franchise Agreement upon the franchisee's death or permanent disability?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary | |
|---|---|---|---|
| m. | Conditions for franchisor approval of transfer | Section 14.2.2 | Conditions include you must pay all amounts due us or our affiliates, not otherwise be in default, sign a general release, and pay a transfer fee. Transferee must meet our criteria, complete training to our satisfaction and sign current Franchise Agreement |
| n. | Franchisor's right of first refusal to acquire franchisee's business | Section 14.4 | Within 30 days after notice, we have the option to purchase the transferred interest on the same terms and conditions. |
| o. | Franchisor's option to purchase franchisee's business | Sections 14.8 and 18.12 | We have the right to purchase the assets of the Franchised Business for fair market value (a) at any time during the term of your Franchise Agreement, or (b) on termination, non-extension or refusal of a successor term. |
| p. | Death or disability of franchisee | Section 14.5 | The Franchise Agreement will terminate upon your death or permanent disability, and the Franchised Business must be transferred within six months to a replacement franchisee that we approve. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 50–56)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, the Franchise Agreement will terminate if the franchisee dies or becomes permanently disabled. Following such an event, the rights to the Franchised Business must be transferred to a replacement franchisee approved by Crave within six months. This means that the franchisee's heirs or legal representatives have a limited time to find a suitable buyer who meets Crave's criteria and is willing to take over the business.
This provision is fairly standard in franchising, as it ensures the continued operation of the business under qualified management and protects the brand's integrity. The six-month window provides some flexibility for the franchisee's estate to handle the transfer, but it also creates a sense of urgency.
It is important to note that Crave has the right to approve the replacement franchisee, which means that the proposed buyer must meet Crave's then-current standards for franchisees, including financial qualifications, experience, and training. If a suitable replacement franchisee cannot be found within the six-month period, the Franchise Agreement will terminate, and the estate may lose the right to operate the Crave business. Prospective franchisees should consider this when planning their estate and business succession.