If the Crave Franchised Business is owned by an entity, who must sign the Franchise Agreement as a Principal?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
You may be an individual, corporation, partnership, or other form of legal entity. If you are an entity, then under the Franchise Agreement, each of your owners would be characterized as Franchisee's Principals (referred to in this Disclosure Document as "your Principals"). The Franchise Agreement is signed by us, by you, and individually by each of your Principals. By signing the Franchise Agreement, your Principals agree to be individually bound by the obligations contained in the Franchise Agreement. Depending on the type of business activities in which you or your Principals may be involved, we may require you or your Principals to sign additional confidentiality and noncompetition agreements.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 48–49)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, if a franchisee is a corporation, partnership, or other legal entity, each of the entity's owners is considered a Principal. The Franchise Agreement must be signed not only by Crave and the franchisee entity but also individually by each of the franchisee's Principals. This means that all owners of the franchisee entity are individually bound by the obligations outlined in the Franchise Agreement.
This requirement ensures that Crave has recourse to the individuals behind the entity, not just the entity itself. By signing the Franchise Agreement, the Principals agree to be personally liable for the franchisee's obligations. This is a common practice in franchising, as it provides the franchisor with added security and encourages the owners to actively manage the franchise.
Depending on the business activities of the franchisee or its Principals, Crave may also require them to sign additional confidentiality and noncompetition agreements. This is to further protect Crave's interests and prevent any potential conflicts of interest. Prospective franchisees should carefully review these requirements and understand the implications of signing the Franchise Agreement as a Principal.