What happens to the terms of the original Crave franchise agreement upon transfer?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
(e) The transferee shall enter into a written agreement, in a form reasonably satisfactory to us, assuming full, unconditional, joint and several liability for, and agreeing to perform from the date of the transfer, all obligations, covenants and agreements contained in this Agreement; and, if transferee is a corporation or a partnership, transferee's shareholders, partners or other investors, as applicable, shall execute such agreement as transferee's principals and guarantee the performance of all such obligations, covenants and agreements;
(f) The transferee shall execute, for a term ending on the expiration date of this Agreement and with such successor terms as may be provided by this Agreement, the standard form franchise agreement then being offered to new System franchisees and other ancillary agreements as we may require for the Franchised Business, which agreements shall supersede this Agreement and its ancillary documents in all respects and the terms of which agreements may differ from the terms of this Agreement, including, without limitation, the then-current Royalty Fee and Brand Development Fee (as applicable); provided, however, that the transferee shall not be required to pay any initial franchise fee;
(g) The transferee, at its expense, shall renovate, modernize and otherwise upgrade the Franchised Business and, if applicable, any delivery vehicles to conform to the then-current standards and specifications of the System, and shall complete the upgrading and other requirements which conform to the System-wide standards within the time period reasonably specified by us;
(h) The transferor shall remain liable for all of the obligations to us in connection with the Franchised Business incurred prior to the effective date of the transfer and shall execute any and all instruments reasonably requested by us to evidence such liability;
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, when a franchise is transferred, the transferee (the new franchisee) is required to execute the standard form franchise agreement then being offered to new Crave franchisees. This new agreement will be for a term ending on the original expiration date of the initial agreement, including any successor terms. This new agreement supersedes the original franchise agreement in all respects.
This means the terms of the new agreement may differ from the original agreement. These differences could include variations in the then-current Royalty Fee and Brand Development Fee. However, the transferee is not required to pay any initial franchise fee. The transferee must also renovate, modernize, and upgrade the Franchised Business to meet Crave's then-current standards and specifications within a reasonable timeframe specified by Crave.
In practice, this clause allows Crave to update the franchise agreement terms with each transfer, ensuring all franchisees operate under the most current standards. While the transferee benefits from not paying an initial franchise fee, they must be prepared to invest in upgrades and potentially accept different royalty and brand development fee structures. The original transferor remains liable for all obligations to Crave incurred prior to the effective date of the transfer.