What representation does a Crave franchisee make regarding their financial statements?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
- Franchisee, together with Franchisee's advisers, has sufficient knowledge and experience in financial and business matters to make an informed investment decision with respect to the Franchise granted by the Franchise Agreement.
Initial
Acknowledgement of the truthfulness of the statements below are an inducement for the Franchisor to enter into a Franchise Agreement. Notify Franchisor immediately, prior to acknowledgment, if any statement below is incomplete or incorrect.
No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, a franchisee acknowledges several key points regarding their financial and business acumen when signing the Franchise Agreement. Specifically, the franchisee confirms that they, along with their advisors, possess sufficient knowledge and experience in financial and business matters to make an informed investment decision concerning the Crave franchise. This acknowledgment is a crucial element of the agreement, indicating that the franchisee understands the financial risks and rewards associated with the franchise.
Furthermore, the franchisee's acknowledgment serves as an inducement for Crave to enter into the Franchise Agreement. This means that Crave relies on the franchisee's representation of their financial understanding when deciding to grant the franchise. If any statement within the acknowledgment is incomplete or incorrect, the franchisee is obligated to notify Crave immediately before proceeding with the agreement. This requirement underscores the importance of transparency and accuracy in the franchisee's self-assessment.
It's important to note that while the franchisee acknowledges their financial understanding, the Franchise Disclosure Document also includes a provision that protects the franchisee. Specifically, no statement, questionnaire, or acknowledgment signed by the franchisee can waive claims under applicable state franchise law, including fraud in the inducement, or disclaim reliance on statements made by Crave. This provision ensures that franchisees retain their legal rights and recourse, even while acknowledging their financial capabilities.
In essence, the franchisee's acknowledgment is a confirmation of their preparedness to manage the financial aspects of the Crave franchise, while also being protected by laws that prevent them from unknowingly waiving their rights based on statements made during the commencement of the franchise relationship. This balance ensures that both parties enter the agreement with a clear understanding of their responsibilities and protections.