Is the initial franchise fee for a Crave franchise refundable, and if not, why?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
s the Successor Franchise Documents within the timeframe specified in Section 3.2, or if you provide written notice to us within the final sixty (60) days of the Initial Term indicating that you do not wish to sign a successor franchise agreement.
ARTICLE 4 FEES
4.1 Initial Franchise Fee
Upon the execution of this Agreement, you agree to pay to us an initial franchise fee in the amount of __________________________ ($_________) ("Initial Franchise Fee").
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, the initial franchise fee is generally not refundable. Upon signing the Franchise Agreement, the franchisee must pay Crave an initial franchise fee. This fee is considered fully earned by Crave as compensation for the administrative and other expenses they incur in granting the franchise, as well as for the lost opportunity to grant the franchise to someone else. Therefore, under normal circumstances, the initial franchise fee is non-refundable.
However, there are exceptions to this policy in certain states. For example, in Maryland, the initial fees and payments are deferred until Crave completes its pre-opening obligations under the franchise agreement. Similarly, in South Dakota and Virginia, the payment of the initial franchise fee is deferred until Crave has met its pre-opening obligations and the franchisee's business is open and operating.
Prospective franchisees should carefully review the FDD and any state-specific addenda to understand the specific terms and conditions related to the initial franchise fee and its potential refundability in their state. It is also advisable to consult with a franchise attorney to ensure a full understanding of their rights and obligations.