How does the initial franchise fee for Crave (Item 5) relate to the lack of financing (Item 10)?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
In general, none of the expenses listed in the above chart are refundable. We do not finance any portion of your initial investment.
Notes:
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- Development Fee; Initial Franchise Fee. These fees are discussed in Item 5. Our estimate assumes you will develop the minimum of three Franchised Businesses, with the low end representing the development fee if you commit to develop three Express Restaurants and the high end representing the development fee if you commit to develop three Restaurants. If you choose to develop additional Franchised Businesses, your development fee will increase by 50% of the initial franchise fee for each additional Food Truck or Restaurant you commit to develop.
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, the initial franchise fee is a key component of a franchisee's initial investment, and Crave does not offer financing for this or any other part of that investment. The initial franchise fee for a single Crave Restaurant is $45,000, while for a Crave Food Truck, it is $30,000. These fees are paid in a lump sum when the Franchise Agreement is signed. For multi-unit development agreements, the development fee is 100% of the initial franchise fee for the first unit, plus 50% for each additional unit. For example, developing three restaurants would incur a fee of $85,000. Veterans and active-duty military personnel may receive a $5,000 discount on the initial franchise fee for their first franchise. Additionally, franchisees must pay $5,000 for a grand opening marketing campaign for a Restaurant or $2,500 for a Food Truck. These fees are non-refundable.
Item 7 of the FDD, which outlines the estimated initial investment, includes the initial franchise fee. For a restaurant, the estimated initial investment ranges from $5,000 to $35,000 for design and architect fees, $50,000 to $250,000 for leasehold improvements, $3,000 to $30,000 for signage, and $100,000 to $150,000 for equipment, furniture, and fixtures. The FDD explicitly states that Crave does not finance any portion of the initial investment, meaning franchisees must secure funding through their own means.
Given that Crave does not offer financing, prospective franchisees need to have sufficient capital or secure external financing to cover the initial franchise fee and other startup costs. This lack of financing from Crave places the onus on the franchisee to manage their financial resources effectively or seek loans from third-party lenders. The initial franchise fee is non-refundable, so franchisees risk losing this amount if they cannot proceed with opening their Crave business. This highlights the importance of thorough financial planning and securing necessary funding before signing the Franchise Agreement.
In the State of South Dakota, Crave will defer the payment of the initial franchise fee, development fee, and any other initial payment until all of their material pre-opening obligations have been satisfied and until the franchisee opens their business and it is operating. However, the franchisee must execute the Franchise Agreement prior to looking for a site or beginning training.