What level of supervision must the Crave franchisee be unable to provide due to permanent disability?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
14.5 Death or Disability
- 14.5.1 The grant of rights under this Agreement is personal to you, and on the death or permanent disability of you or any of your Principals, the executor, administrator, conservator or other personal representative of yours or of the deceased Principal, as the case may be, shall be required to transfer your or your Principal's interest in this Agreement within six (6) months from the date of death or permanent disability to a third party approved by us. Failure to transfer in accordance with the forgoing will constitute a material default and the franchise granted by this Agreement will terminate. For purposes of this Agreement, the term "permanent disability" means a mental or physical disability, impairment or condition that is reasonably expected to prevent or actually does prevent such person from providing continuous and material supervision of the operation of the Franchised Business during the six (6) month period from its onset.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, a franchisee's "permanent disability" is defined as a mental or physical condition that is reasonably expected to prevent, or actually does prevent, the franchisee from providing continuous and material supervision of the operation of the Franchised Business during the six-month period from its onset. This definition is important because it triggers certain requirements regarding the transfer of the franchise.
Specifically, if a franchisee experiences such a disability, their representative (e.g., executor or conservator) is required to transfer the franchisee's interest in the Franchise Agreement within six months to a third party approved by Crave. Failure to do so constitutes a material default, leading to the termination of the franchise agreement. This clause ensures that Crave restaurants continue to be actively managed, even in the event of a franchisee's disability.
In the interim, immediately following the disability, the Franchised Business must be supervised by a manager satisfactory to Crave. Alternatively, Crave may, at its discretion, provide interim management. If Crave provides interim management, they will receive a fee equal to 10% of the Gross Sales generated by the Franchised Business during their operation, plus reimbursement for all costs of travel, lodging, meals, and other expenses reasonably incurred. This arrangement continues until the franchise is transferred to the deceased or disabled individual's lawful heirs or successors.