What outstanding obligations must be satisfied before Crave will approve a transfer?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
fer, subject to the same rights of first refusal by us or our nominee, as in the case of an initial offer. Our failure to exercise the option afforded by this Section 11.3 shall not constitute a waiver of any other provision of this Agreement, including all of the requirements of this Section with respect to the proposed transfer.
11.4 You acknowledge and agree that the restrictions on transfer imposed herein are reasonable and are necessary to protect the Development Rights, the System and the Marks, as well as our reputation and image, and are for the protection of us, you and other multi-unit developers and franchisees. Any assignment or transfer permitted by this Section 11 shall not be effective until we receive a completely executed copy of all transfer documents, and we consent in writing thereto.
11.5 Except as provided in this Section 11, we agree not to unreasonably withhold our consent to a sale, assignment or transfer by you hereunder. Consent to such transfer otherwise permitted or permissible as reasonable may be refused unless:
11.5.1 All of your obligations created by this Agreement, all other franchise documents, including all Franchise Agreements, and the relationship created hereunder are assumed by the transferee.
11.5.2 All ascertained or liquidated debts of you to us or our affiliated or subsidiary corporations are paid.
- 11.5.3 You are not in default hereunder.
11.5.4 We are reasonably satisfied that the transferee meets all of our requirements for new multi-unit developers, including but not limited to, good reputation and character, business acumen, operational ability, management skills, financial strength and other business considerations.
11.5.5 Transferee executes or, in appropriate circumstances, causes all necessary parties to execute, our standard form of Multi-Unit Development Agreement, Franchise Agreements for all Franchised Businesses open or under construction hereunder, and such other then-current ancillary agreements being required by us of new multi-unit developers on the date of transfer.
11.5.6 You execute a general release, in a form satisfactory to us, of any and all claims against us, our officers, directors, employees and principal stockholders of any and all claims and causes of action that you may have against us or any subsidiary or affiliated corporations in any way relating to this Agreement or the performance or non-performance thereof by us. You also agree to subordinate any claims you may have against the transferee to us and indemnify us against any claims by the transferee relating to misrepresentations in the transfer process, specifically excluding those representations made by us in the Franchise Disclosure Document given to the transferee.
11.5.7 When you submit your request for our approval of the transfer, you shall pay to us a transfer fee equal to Five Thousand Dollars ($5,000) to cover our reasonable costs in effecting the transfer and in providing training and other initial assistance to transferee.
11.6 If the proposed transfer is a transfer between any of you, or if you wish to add a new owner, then you shall submit to us, in writing, a request for our approval of the proposed transfer between any of you or to a new owner together with any information we require in order to evaluate the proposed transfer, including, without limitation, financial and other information relating to the proposed transferee, and a transfer fee in the amount of Five Thousand Dollars ($5,000). Our approval of your request will not be unreasonably withheld. If you are requesting to add an owner, the proposed new owner must meet our criteria, including financial capability and that the new owner is not participating in a competing business, and the new ownership structure shall not change your majority ownership. If we approve the addition of a new owner, such new owner shall be bound by the covenants of confidentiality and non-competition set forth herein and shall execute any documents we may require to enforce these covenants.
11.7 Death or Permanent Disability.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, before a transfer of a franchise can be approved, several obligations must be met. The transferee must assume all obligations under the existing agreements. All outstanding debts owed to Crave or its affiliates must be paid in full. The franchisee must not be in default of the franchise agreement.
Crave must be reasonably satisfied that the proposed transferee meets the requirements for new multi-unit developers. This includes having a good reputation and character, business acumen, operational ability, management skills, and financial strength. The transferee must also execute Crave's standard form of Multi-Unit Development Agreement, Franchise Agreements for all Franchised Businesses (whether open or under construction), and any other ancillary agreements required of new multi-unit developers at the time of transfer.
The transferring franchisee must execute a general release of all claims against Crave and its related parties. They must also agree to subordinate any claims they may have against the transferee to Crave and indemnify Crave against claims by the transferee related to misrepresentations in the transfer process, excluding those made by Crave in the Franchise Disclosure Document. Additionally, a transfer fee of $5,000 must be paid to Crave to cover the costs of the transfer and providing training and assistance to the transferee.
Finally, the transferee must enter into a written agreement assuming full liability for all obligations in the Franchise Agreement. If the transferee is a corporation or partnership, its shareholders or partners must guarantee the performance of these obligations. The transferee must also execute the standard form franchise agreement then being offered to new franchisees, which may have different terms than the original agreement, although the transferee will not be required to pay an initial franchise fee. The transferee is responsible for upgrading the Franchised Business to meet current system standards and completing any required training programs.