How will the initial unamortized portion of the cost of the Crave sublessee's improvements be calculated?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
- 2. Landlord Buyout Provision: As per agreement with the Landlord and the Sublessor, Landlord may, without cause, at any time, terminate the agreement with Landlord and Sublessor regarding the location in this Agreement with a prior ninety (90) days written notice. In the event such termination shall take place during the initial term of this sublease, Landlord shall reimburse sublessor for initial unamortized portion of the cost of sublessee's improvements to the subleased premises, calculated on a straight-line depreciation basis over said initial sublease term. Sublessor shall pay sublessee such funds, received from Landlord. Should Landlord determine cause for nonpayment of funds, Sublessor shall not be responsible for such funds. Landlord may require Sublessor to provide proof if such cause of this provision if exercised, which Sublessee shall provide to Sublessor without issue. Sublessee acknowledges that failure to do so may impact the ability for Sublessor to receive such funds from Landlord, which will cause non-payment to Sublessee. Such documentation shall be received within fifteen (15) days upon written request. It is expressly understood and agreed to by the parties that the amount specified by the parties is reasonable and Sublessor shall not be liable for any other cost or expense of sublessee seizing operations in the applicable Subleased premises. Upon full amortization of said
initial development costs over the initial Sublease term, the Sublessor, at no time for any reason be held responsible for fees as a result of exercising this provision.
Source: Item 22 — CONTRACTS (FDD pages 62–63)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, the initial unamortized portion of the cost of the sublessee's improvements to the subleased premises will be calculated on a straight-line depreciation basis over the initial sublease term. This calculation is relevant if the Landlord exercises their buyout provision, terminating the agreement with Crave WM Franchising LLC.
In the event of such a termination during the initial term of the sublease, the Landlord is obligated to reimburse Crave for the unamortized portion of the sublessee's improvement costs. Crave, in turn, will pay these funds to the sublessee. However, if the Landlord determines there is a valid reason for nonpayment, Crave will not be responsible for providing these funds to the sublessee.
The sublessee is required to provide proof of these costs to Crave within fifteen days of a written request to ensure Crave can receive the funds from the Landlord. It is important to note that Crave will not be liable for any other costs or expenses incurred by the sublessee as a result of ceasing operations at the subleased premises. Once the initial development costs are fully amortized over the initial sublease term, Crave will not be held responsible for any fees resulting from the exercise of this provision.