Does Crave require approval of transfers by multi-unit developers, and if so, under what conditions is consent granted?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Multi Unit Development Agreement | Summary | |
|---|---|---|---|
| h. | "Cause" defined – non curable defaults | 9 | Failure to meet your minimum performance schedule; failure to comply with applicable laws; if all of your Franchised Businesses stop operating; unauthorized transfer; you make a material misrepresentation to us; conviction by you or your owners of an indictable offense; bankruptcy or insolvency; if a Franchise Agreement with us is terminated according to its terms (this is a cross-default provision) |
| i. | Multi-unit developer's obligations on termination/ non-renewal | 10 | You must stop selecting sites for Franchised Businesses, and you may not open any more Franchised Businesses |
| j. | Assignment of contract by franchisor | 11 | No restriction on our right to assign. However, no assignment will be made except to an assignee who, in our good faith judgment, is willing and able to assume our obligations under the Multi-Unit Development Agreement. |
| k. | "Transfer" by multi-unit developer – defined | 11 | Includes transfer of any interest in the Multi Unit Development Agreement |
| l. | Franchisor approval of transfer by multi-unit developer | 11 | We have the right to approve all transfers, our consent not to be unreasonably withheld |
| m. | Conditions for franchisor approval of transfer | 11 | Conditions for transfer include not being in default, at least 25% of all Franchised Businesses required to be developed are open or under construction, all debts are paid, the buyer meets our current criteria for new Multi Unit Developers, execution of a general release, payment of transfer fee, buyer personally guarantees all obligations |
| n. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 50–56)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, Crave requires multi-unit developers to obtain approval for any transfer of interest in the Multi-Unit Development Agreement. Crave retains the right to approve all transfers, but states that consent will not be unreasonably withheld. This means that while Crave has the power to deny a transfer, they must have a legitimate business reason for doing so.
Crave outlines specific conditions that must be met for a transfer to be approved. These conditions include the multi-unit developer not being in default of their agreement, having at least 25% of the required Franchised Businesses open or under construction, and having paid all outstanding debts. Additionally, the buyer must meet Crave's current criteria for new Multi-Unit Developers, execute a general release, pay a transfer fee, and personally guarantee all obligations under the agreement.
These stipulations are fairly standard in franchising, as franchisors want to ensure that any new multi-unit developer is financially sound, experienced, and committed to the Crave brand. The requirement that 25% of the units be open or under construction suggests that Crave wants to see a demonstrated commitment to development before allowing a transfer. The personal guarantee ensures that the buyer is fully invested in the success of the multi-unit operation.
Crave also retains the right of first refusal, meaning they have the option to match any offer made by a potential buyer and acquire the multi-unit developer's business themselves. This provision allows Crave to maintain control over its development strategy and protect its brand by ensuring that the right parties are developing the Crave concept.