For a limited liability company or similar entity, what does the Crave franchise agreement consider to be the functional equivalents of a corporation's organizational documents?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
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6.1 Best Efforts
You covenant and agree that you shall make all commercially reasonable efforts to operate the Franchised Business so as to achieve optimum sales.
6.2 Representations of Corporate Entity
If you are a corporation, limited liability company, or partnership, you and the Principals represent, warrant and covenant that:
- 6.2
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, if a franchisee is a limited liability company, the operating agreement is considered the equivalent of a corporate charter. Similarly, for a partnership, the written partnership agreement serves this function.
This means that the operating agreement for an LLC, or the partnership agreement for a partnership, must stipulate that the entity's activities are primarily confined to operating the Crave franchise. Crave needs to provide written consent if the franchisee entity engages in other business activities.
This requirement ensures that the franchisee entity is focused on the Crave business and that Crave has some control over the entity's activities. A prospective franchisee should carefully review their operating or partnership agreement to ensure compliance with this requirement and discuss any potential conflicts with Crave before signing the franchise agreement.