How is the initial franchise fee for the first Crave Franchised Business paid when signing a Multi-Unit Development Agreement?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
You will sign the Franchise Agreement for the first Franchised Business at the same time you sign the Multi-Unit Development Agreement, and we will apply a portion of the development fee to pay the initial franchise fee for the first Franchised Business in full. For each additional Franchised Business you will develop under the Multi-Unit Development Agreement, we will apply a credit of 50% of the amount of the initial franchise fee for that Franchised Business, and the balance of the initial franchise fee due for that Franchised Business is payable in a lump sum when you sign the Franchise Agreement for that Franchised Business. The development fee is imposed uniformly on all multi-unit developers and is not refundable under any circumstances.
Source: Item 5 — INITIAL FEES (FDD pages 11–12)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, when a franchisee signs a Multi-Unit Development Agreement, they also sign the Franchise Agreement for the first Crave Franchised Business. The initial franchise fee for this first business is covered by applying a portion of the development fee towards it, effectively paying the initial franchise fee in full. The development fee itself is equal to 100% of the initial franchise fee for the first Franchised Business, plus 50% of the initial franchise fee for each additional Franchised Business the franchisee commits to develop under the agreement.
For each additional Crave Franchised Business developed under the Multi-Unit Development Agreement, a credit of 50% of the initial franchise fee amount is applied. The remaining balance of the initial franchise fee for each subsequent franchise is then payable as a lump sum when the franchisee signs the Franchise Agreement for that particular business.
For example, if a franchisee commits to developing three Crave Food Trucks, the development fee is calculated as $30,000 for the first truck plus $15,000 for each of the two additional trucks, totaling $60,000. If the commitment is for three Crave Restaurants, the development fee would be $45,000 for the first restaurant plus $20,000 for each of the two additional restaurants, totaling $85,000. The FDD specifies that the development fee is fully earned by Crave upon receipt and is non-refundable, nor is it credited against any other future fees.
This arrangement benefits Crave by securing a commitment for multiple locations and provides an upfront capital infusion. For the franchisee, it offers a structured development plan with a portion of the initial investment spread out over time, although the development fee is non-refundable regardless of circumstances.