If Crave expends funds to maintain collateral for the franchisee, is the franchisee obligated to reimburse Crave?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition to all other obligations to comply with System standards, Franchisee shall, at Franchisee's sole expense:
- (i) maintain and repair the Food Truck, to ensure that the Food Truck remains in good working order and condition.
Franchisee, at Franchisee's sole expense, shall cause the Food Truck to be regularly serviced in accordance with any warranty and manufacturer's guidelines.
Franchisee shall provide Franchisor with copies of all maintenance and repair records and invoices upon request;
- (ii) maintain the exterior of the Food Truck in clean and good appearance.
Franchisee shall promptly repair all scratches and dents and shall have the Food Truck professionally washed no less than one (1) time per week; and
- (iii) file all required state registration and inspection reports for the Food Truck.
Franchisee shall submit the Food Truck for annual vehicle inspection, as required by state law, and submit such reports to Franchisor.
Franchisee shall pay all registration and inspections fees.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, it is unclear whether a Crave franchisee is obligated to reimburse Crave if the franchisor expends funds to maintain collateral for the franchisee. The excerpts provided do not address this specific scenario.
However, the FDD does outline the franchisee's responsibilities regarding the maintenance and repair of a Crave food truck. According to the addendum, the franchisee is solely responsible for maintaining and repairing the food truck to ensure it remains in good working order and condition, including regular servicing according to warranty and manufacturer's guidelines. The franchisee must also maintain the exterior of the food truck in a clean and good appearance, promptly repairing any scratches and dents, and professionally washing the food truck no less than one time per week.
To gain clarity on whether a franchisee would be required to reimburse Crave for expenditures related to maintaining collateral, a prospective franchisee should seek clarification from the franchisor. Specifically, they should inquire about any circumstances under which Crave might expend funds to maintain collateral on behalf of the franchisee and whether the franchisee would be responsible for reimbursing those expenses.