What happens if a Crave multi-unit developer begins developing a Franchised Business before meeting all pre-development obligations?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Multi Unit Development Agreement | Summary | |
|---|---|---|---|
| a. | Length of the franchise term | 6 | Length of the Minimum Performance Schedule |
| b. | Renewal or extension of the term | 5 | After all Franchised Businesses have been developed, we will negotiate in good faith another Multi-Unit Development Agreement. |
| c. | Requirements for multi unit developer to renew or extend | Not applicable | Not applicable |
| d. | Termination by multi-unit developer | Not applicable | You may seek to terminate on any grounds available to you at law. |
| e. | Termination by franchisor without cause | Not applicable | Not applicable |
| f. | Termination by franchisor with cause | 9 | We can terminate if you commit any one of several listed violations. |
| g. | "Cause" defined – curable defaults | 9 | If you use the Marks or System without our consent; participating in a competing business; failure to pay money to us when due; you begin developing a Franchised Business before all of your pre-development obligations are met; failure to obtain our consent when required; you open or begin operating any Franchised Business before a Franchise Agreement for that Franchised Business has been signed |
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, if a multi-unit developer begins developing a Franchised Business before meeting all pre-development obligations, Crave can terminate the agreement with cause. This is considered a curable default.
This means that Crave has the right to end the Multi-Unit Development Agreement if the developer doesn't fulfill all the necessary steps before starting construction or development of a franchise location. These pre-development obligations likely include things like site approval, securing financing, completing training, and obtaining necessary permits.
This provision protects Crave by ensuring that multi-unit developers are fully prepared and compliant before they begin building out multiple franchise locations. It allows Crave to maintain brand standards and reduce the risk of poorly executed or non-compliant franchise locations. For a prospective multi-unit developer, this highlights the importance of carefully understanding and adhering to all pre-development requirements outlined in the Multi-Unit Development Agreement to avoid potential termination.