Which items in the Crave Disclosure Document relate to pre-opening purchases/leases?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
e Disclosure Document is amended to state that a franchisee may bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law.
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- Item 17 of the Disclosure Document is amended to state that any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the grant of the franchise.
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- Item 17 of the Disclosure Document is amended to state that the provisions in the Franchise Agreement and Multi-Unit Development Agreement which provide for termination upon bankruptcy of the franchisee/multi-unit developer may not be enforceable under federal bankruptcy law (11 U.S.C. Section 101 et seq.).
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- Item 5 of the Disclosure Document is amended to state: "Based upon the franchisor's financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the franchise agreement.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 30–31)
What This Means (2025 FDD)
According to the 2025 Crave Franchise Disclosure Document, Item 5 addresses pre-opening obligations in relation to fees and payments. Specifically for Maryland franchisees, the Maryland Securities Commissioner requires a financial assurance based on Crave's financial condition. As a result, all initial fees and payments owed by franchisees in Maryland are deferred until Crave completes its pre-opening obligations as outlined in the franchise agreement. This also applies to development fees and initial payments by area developers, which are deferred until the first franchise under the development agreement opens.
Additionally, the South Dakota addendum in Item 23 states that Crave will defer the payment of the initial franchise fee, development fee, and any other initial payment until all material pre-opening obligations have been satisfied and the franchisee's business is open and operating. However, the franchisee must execute the Franchise Agreement before looking for a site or beginning training.
Item 11 also mentions pre-opening obligations, stating that Crave is not required to provide any assistance except as listed. For those entering into a Multi-Unit Development Agreement, Crave will grant rights to a Development Area within which the franchisee will establish and operate an agreed-upon number of Franchised Businesses under separate Franchise Agreements. Before the opening of a Franchised Business, Crave will provide assistance and services.