What happens if a transfer is made in violation of the Crave franchise agreement?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
14.2.1 You understand and acknowledge that the rights and duties set forth in this Agreement are personal to you, and that we have granted rights under this Agreement in reliance on the business skill, financial capacity and personal character of you and the Principals. Accordingly, neither you nor any Principal shall sell, assign (including but not limited to by operation of law, such as an assignment under bankruptcy or insolvency laws, in connection with a merger, divorce or otherwise), transfer, convey, give away, pledge, mortgage or otherwise encumber any direct or indirect interest in you, in this Agreement, in the Franchised Business and/or any of the Franchised Business' material assets (other than in connection with replacing, upgrading or otherwise dealing with such assets as required or permitted by this Agreement), without our prior written consent. Any purported assignment or transfer, by operation of law or otherwise, made in violation of this Agreement shall be null and void and shall constitute a material event of default under this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, if a franchisee attempts to transfer any direct or indirect interest in the franchise, the franchise agreement, or the franchised business's material assets without Crave's prior written consent, the attempted transfer will be considered null and void. Furthermore, such an unauthorized transfer constitutes a material breach of the franchise agreement.
This provision underscores the importance Crave places on the initial franchisee's skills, financial capacity, and character when awarding the franchise. By requiring prior consent, Crave retains control over who operates a franchise under its brand, ensuring that new operators meet their standards.
For a prospective franchisee, this means that selling or transferring the business requires careful adherence to the procedures outlined in the franchise agreement. Failure to obtain Crave's consent before a transfer can lead to serious consequences, including termination of the franchise agreement.