What liability does the transferee assume in the transfer agreement for a Crave franchise?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
edit rating; transferee's aptitude and ability to conduct the business franchised herein (as may be evidenced by prior related business experience or otherwise); transferee's financial resources and capital for operation of the business; and the geographic proximity and number of other Franchised Businesses owned or operated by transferee;
- (e) The transferee shall enter into a written agreement, in a form reasonably satisfactory to us, assuming full, unconditional, joint and several liability for, and agreeing to perform from the date of the transfer, all obligations, covenants and agreements contained in this Agreement; and, if transferee is a corporation or a partnership, transferee's shareholders, partners or other investors, as applicable, shall execute such agreement as transferee's principals and guarantee the performance of all such obligations, covenants and agreements;
- (f) The transferee shall execute, for a term ending on the expiration date of this Agreement and with such successor terms as may be provided by this Agreement, the standard form franchise agreement then being offered to new System franchisees and other ancillary agreements as we may require for the Franchised Business, which agreements shall supersede this Agreement and its ancillary documents in all respects and the terms of which agreements may differ from the terms of this Agreement, including, without limitation, the then-current Royalty Fee and Brand Development Fee (as applicable); provided, however, that the transferee shall not be required to pay any initial franchise fee;
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, a transferee (the person or entity buying the franchise) must enter into a written agreement that assumes full, unconditional, joint, and several liability for all obligations outlined in the original franchise agreement from the date of transfer. This means the transferee becomes fully responsible for all aspects of the agreement, just as the original franchisee was. If the transferee is a corporation or partnership, its shareholders, partners, or other investors must also guarantee the performance of these obligations. This ensures Crave has multiple parties responsible for upholding the franchise agreement.
Furthermore, the transferee must execute Crave's standard form franchise agreement for the remaining term of the original agreement, including any successor terms. This new agreement supersedes the original and may have different terms, including potentially different Royalty Fees and Brand Development Fees. However, the transferee is not required to pay an initial franchise fee. This requirement ensures that all franchisees operate under the most current franchise agreement terms, which may evolve over time.
The original franchisee (transferor) remains liable for all obligations to Crave incurred before the transfer's effective date. This protects Crave from any liabilities or breaches that occurred under the original franchisee's management. The transferor must also execute any instruments reasonably requested by Crave to evidence this liability, providing further legal assurance.
In summary, when transferring a Crave franchise, the transferee takes on complete responsibility for the franchise agreement's obligations from the transfer date forward, while the transferor remains liable for any prior obligations. This ensures a smooth transition and protects Crave's interests by maintaining accountability for both parties involved in the transfer.