What happens if a state imposes a sales or other tax on the Royalty Fees for a Crave franchise?

According to Crave's 2025 Franchise Disclosure Document, if any state imposes a sales or other tax on the Royalty Fees, Crave has the right to collect this tax from the franchisee. This means that in addition to the standard royalty fee, which is 8% of Gross Sales for Restaurants, Food Trucks, and Express locations, a franchisee may also be responsible for paying any state-imposed taxes on that royalty fee.

This could impact a franchisee's profitability, as it adds an additional expense on top of the standard royalty. Franchisees should factor in potential state tax implications when evaluating the overall cost of the franchise. It is important to note that the FDD does not specify how Crave will determine which states this applies to or how often these taxes might be collected.

Prospective franchisees should investigate the tax laws in their specific state or area to understand whether such a tax is likely to be imposed on royalty fees. It would also be prudent to ask Crave for clarification on how they handle the collection and remittance of these taxes to ensure full compliance and avoid any unexpected financial burdens.