If Crave discovers inconsistencies or mistakes in royalty statements or payments, what is the franchisee required to do?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
You understand and agree that our receipt or acceptance of any of the statements furnished or royalties paid to us (or the cashing of any royalty checks or processing of any EFTs) shall not preclude us
from questioning the correctness thereof at any time and, in the event that any inconsistencies or mistakes are discovered in such statements or payments, they shall immediately be rectified by you and the appropriate payment shall be made by you.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, if Crave discovers any inconsistencies or mistakes in a franchisee's royalty statements or payments, the franchisee is obligated to immediately rectify the errors and make the appropriate payment. This requirement ensures that Crave receives accurate royalty payments based on the franchisee's gross sales.
This provision in the franchise agreement protects Crave's revenue stream by ensuring franchisees promptly correct any underreporting or payment errors. Franchisees should maintain meticulous records of their gross sales and royalty payments to minimize discrepancies and avoid potential disputes with Crave.
While this clause protects Crave, franchisees should also ensure they have a system for verifying the accuracy of royalty calculations and statements. Franchisees should also retain the right to question any discrepancies they find. This will help ensure fair financial dealings between both parties.