What is the relationship between the Crave Development Agreement and the Franchise Agreement?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
( The Agreement authorizes and obliges Multi-Unit Developer ) "Crave" outlets to establish and operate pursuant to a Franchise Agreement for each Franchised Business. The following is Multi-Unit Developer's Minimum Performance Schedule: Minimum Cumulative Number By this Date of Franchise Agreements for Franchised Businesses to be located and Operating within the Development Area Total: upon the opening of the final Franchised Business The Minimum Performance Schedule shall be deemed completed, and this Agreement shall expire, to be developed pursuant to this Agreement.
7.1 Except as otherwise provided herein, this Agreement includes only the right to select sites for the establishment of Franchised Businesses and to submit the same to us for our approval in accordance with the terms of this Agreement. This Agreement does not include the grant of a license by us to you of any rights to use the Marks, the System, or to open or operate any Franchised Businesses within the Development Area. You shall obtain the license to use such additional rights at each Franchised Business upon the execution of each Franchise Agreement by both you and us and only in accordance with the terms of each Franchise Agreement.
3.5 You may enter into the initial Franchise Agreement or any subsequent Franchise Agreement as required under this Agreement using a newly formed entity, such as a limited liability company, corporation or partnership for the sole purpose of entering into a Franchise Agreement and operating the CRAVE Franchised Business pursuant thereto, provided that you shall also personally sign such Franchise Agreement as a principal.
3.6 For each subsequent Franchise Agreement, you shall (i) request Franchisor's then-current Franchise Disclosure Document, (ii) submit to Franchisor all information and other documents requested by Franchisor prior to and as a basis for the issuance of Franchise Agreements in the System, (iii) submit to Franchisor all financial statements reasonably requested by Franchisor, and (iv) satisfy Franchisor's thencurrent financial criteria.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, the Multi-Unit Development Agreement authorizes the developer to establish and operate Crave outlets. This is done under a separate Franchise Agreement for each franchised business. The Development Agreement outlines a Minimum Performance Schedule that the developer must follow, specifying the number of franchise agreements and operating businesses required by certain dates. The Development Agreement expires once the Minimum Performance Schedule is completed.
Under the Development Agreement, Crave grants the developer rights to select sites for Franchised Businesses, which must then be submitted to Crave for approval. The Development Agreement itself does not grant the developer any rights to use Crave's Marks or System, or to open or operate any Franchised Businesses. These rights are only obtained upon the execution of each individual Franchise Agreement. The initial Franchise Agreement can be signed using a newly formed entity, such as an LLC, but the developer must also personally sign the agreement as a principal.
Crave retains certain rights, even with a Development Agreement in place. Crave can continue to construct and operate other dedicated Crave outlets and use the System and Marks outside the Development Area. They can also develop and franchise other trade names, trademarks, or service marks not designated as Marks for use with different franchise systems. Additionally, Crave can develop, merchandise, sell, and license others to sell their products through alternative distribution channels, both inside and outside the Development Area.
For each subsequent Franchise Agreement under a Development Agreement, the developer must request Crave's current Franchise Disclosure Document, submit all required information and documents, provide financial statements, and meet Crave's current financial criteria. This ensures that each new franchise location meets the franchisor's standards and that the developer remains financially capable. The approval of a site by Crave does not guarantee the success or profitability of the Franchised Business at that location.