If a Crave franchisee receives a bona fide offer to purchase their business, what option does Crave have?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
(iv) The failure of the franchisee or proposed transferee to pay any sums owing to the franchisor or to cure any default in the franchise agreement existing at the time of the proposed transfer.
CRAVE FDD 2025 A 82 (h) A provision that requires the franchisee to resell to the franchisor items that are not uniquely identified with the franchisor.
This subdivision does not prohibit a provision that grants to a franchisor a right of first refusal to purchase the assets of a franchise on the same terms and conditions as a bona fide third party willing and able to purchase those assets, nor does this subdivision prohibit a provision that grants the franchisor the right
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, if a franchisee receives a legitimate offer from a third party to buy their franchise assets, Crave has the right of first refusal to purchase those assets themselves. This means Crave can match the terms and conditions of the third-party offer and acquire the franchise. This right does not apply to items that are not uniquely identified with Crave.
This right of first refusal allows Crave to maintain control over who enters the franchise system and ensures that any transfer aligns with their strategic interests. It also allows Crave to prevent the franchise from falling into the hands of a competitor or someone who may not uphold the brand's standards.
However, this provision does not allow Crave to resell items that are not uniquely identified with them. Additionally, the FDD states that a franchisee cannot be restricted from reselling to Crave items that are not uniquely identified with Crave. This protects the franchisee's ability to liquidate assets that are not specific to the Crave brand.
It is important for prospective franchisees to understand this right of first refusal, as it could impact their ability to sell their franchise to a third party. Franchisees should carefully review the terms of the franchise agreement and seek legal counsel to fully understand their rights and obligations in the event of a proposed sale.