What happens to the rights granted under the Crave Multi-Unit Development Agreement in the event of the multi-unit developer's death or disability?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Multi- | Summary | |
|---|---|---|---|
| Unit Development Agreement | |||
| h. “Cause” defined – non- curable defaults | 9 | Failure to meet your minimum performance schedule; failure to comply with applicable laws; if all of your Franchised Businesses stop operating; unauthorized transfer; you make a material misrepresentation to us; conviction by you or your owners of an indictable offense; bankruptcy or insolvency; if a Franchise Agreement with us is terminated according to its terms (this is a cross-default provision) | |
| i. Multi-unit developer’s | 10 | You must stop selecting sites for Franchised | |
| obligations on termination/ | Businesses, and you may not open any more | ||
| non-renewal | Franchised Businesses | ||
| j. Assignment of contract by franchisor | 11 | No restriction on our right to assign. However, no assignment will be made except to an assignee who, in our good faith judgment, is willing and able to assume our obligations under the Multi-Unit Development Agreement. | |
| k. “Transfer” by multi-unit | 11 | Includes transfer of any interest in the Multi- | |
| developer – defined | Unit Development Agreement | ||
| l. Franchisor approval of transfer by multi-unit developer | 11 | We have the right to approve all transfers, our consent not to be unreasonably withheld | |
| m. Conditions for franchisor approval of transfer | 11 | Conditions for transfer include not being in default, at least 25% of all Franchised Businesses required to be developed are open or under construction, all debts are paid, the buyer meets our current criteria for new Multi- Unit Developers, execution of a general release, payment of transfer fee, buyer personally guarantees all obligations | |
| n. Franchisor’s right of first | 11 | We have the right to match the offer. | |
| refusal to acquire multi- | |||
| unit developer’s business | |||
| o. Franchisor’s option to | Not applicable | Not applicable | |
| purchase multi-unit | |||
| developer’s business | |||
| p. Death or disability of multi-unit developer | 11 | The rights granted under the Multi-Unit Development Agreement will terminate upon your death or permanent disability, unless transferred to a third-party approved by us within six months. |
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 rights granted under the Multi-Unit Development Agreement will terminate if the multi-unit developer dies or becomes permanently disabled. However, there is an exception: the rights can be transferred to a third party, provided that Crave approves the transfer within six months of the death or disability.
This provision is important for prospective Crave multi-unit developers to consider. It means that the developer's estate or legal representative will need to act quickly to find a suitable buyer for the development rights and secure Crave's approval. If a suitable buyer cannot be found within six months, the development rights will revert back to Crave, potentially resulting in a significant loss of investment for the developer's estate.
It is common in franchising for agreements to address the possibility of a franchisee's death or disability. Franchisors typically want to ensure that the business continues to operate smoothly and in accordance with brand standards, which may require finding a qualified successor. The six-month window provided by Crave offers some flexibility, but it also creates a time-sensitive situation that needs to be managed carefully.
Prospective multi-unit developers should discuss this provision with Crave to fully understand the requirements and procedures for transferring the development rights in the event of death or disability. Understanding the criteria Crave uses to approve a potential transferee is also crucial. This will help ensure that appropriate plans are in place to protect the developer's investment and the future of the Crave franchise.