What is the meaning of 'permanent disability' in the context of the Crave franchise agreement?

According to Crave's 2025 Franchise Disclosure Document, permanent disability is defined within the context of the franchise agreement as a mental or physical condition that prevents the franchisee (or one of their principals) from providing continuous and material supervision of the Crave franchised business. This condition must last, or be reasonably expected to last, for at least six months from its onset.

This definition is important because if a franchisee or one of their principals experiences such a disability, it triggers certain requirements within the franchise agreement. Specifically, the executor, administrator, or other personal representative is required to transfer the franchisee's interest in the agreement to a third party approved by Crave within six months of the date of the disability. Failure to do so constitutes a material default and can lead to termination of the franchise agreement.

Furthermore, Crave requires notification within ten days of the claim of permanent disability. During the period following the disability, the Crave outlet must be supervised by an interim successor manager satisfactory to Crave. Alternatively, Crave may provide interim management themselves, but will charge a fee equal to ten percent of the gross sales generated by the outlet, plus all costs of travel, lodging, meals, and other expenses incurred. The franchisee agrees to indemnify Crave and its representatives from any acts performed during this interim management period.

This clause protects Crave by ensuring that the franchised business continues to be actively managed and operated according to their standards, even if the original franchisee is unable to do so. For a prospective franchisee, it highlights the importance of having a succession plan or key person insurance to address potential disability scenarios and ensure the continued operation and transfer of the business.