How do the restrictions on suppliers for Crave (Item 8) relate to the initial fees (Item 5)?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 5: INITIAL FEES]
ITEM 5 INITIAL FEES
Franchise Agreement: You must pay us an initial franchise fee of $45,000 for the right to establish a single Crave Restaurant under a Franchise Agreement. If you are purchasing your second or third Restaurant, the initial franchise fee will be reduced to $40,000. If you are purchasing your fourth or later Restaurant, the initial franchise fee will be reduced to $35,000.
You must pay us an initial franchise fee of $30,000 for the right to establish a single Crave Food Truck business under a Franchise Agreement. If you already own and operate a Crave Restaurant and desire to own and operate a Food Truck business, the initial franchise fee for the Food Truck will be reduced to $20,000.
From time to time, we may offer special incentive programs as part of our franchise development activities. We currently offer an incentive program where we will discount the initial franchise fee by $5,000 to veterans and active-duty military personnel for the first Franchised Business purchased. We have the right to offer, modify or withdraw any incentive program without notice to you. The initial franchise fee is imposed uniformly on all franchisees and is not refundable under any circumstances.
Grand Opening Marketing: You must pay us $5,000 if you are opening a Restaurant or $2,500 if you are starting a Food Truck business, for a grand opening marketing campaign that we will conduct on your behalf around the opening of your Franchised Business. This money is not refundable. [Item 8: RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES]
ITEM 8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
You must purchase or lease and install all fixtures, furnishings, equipment (including point-of-sales system and associated hardware and software), décor items, signs and related items we require, all of which must conform to the standards and specifications stated in our Confidential Operations Manual (the "Manual") or otherwise in writing, unless you have first obtained our written consent to do otherwise. You may not install or permit to be installed on the Restaurant premises, or on or in the Food Truck, any fixtures, furnishings, equipment, décor items, signs, games, vending machines or other items without our written consent or that do not comply with our specifications.
To make sure that the highest degree of quality and service is maintained, you must operate the Franchised Business in strict conformity with the methods, standards, and specifications that we prescribe in the Manual or otherwise in writing. You must maintain in sufficient supply and use and sell at all times only those food and beverage items, ingredients, products, materials, supplies and paper goods that meet our standards and specifications. All menu items must be prepared in accordance with the recipes and procedures specified in the Manual or other written materials. You must not deviate from these standards and specifications by the use or offer of non-conforming items, or differing amounts of any items, without obtaining our written consent first. We can, and expect to, modify our standards and specifications as we deem necessary. We will provide you notice in the Manual or otherwise in writing (such as via email) of any changes in our standards and/or specifications.
You must permit us or our agents, during normal business hours, to remove a reasonable number of samples of food or non-food items from your inventory or from the Franchised Business free of charge for testing by us or by an independent laboratory to determine whether the samples meet our then-current standards and specifications. In addition to any other remedies we may have, we may require you to reimburse our costs for the testing if we have not previously approved the supplier of the item or if the sample fails to conform to our specifications.
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, Item 8 outlines restrictions on where franchisees can source products and services, while Item 5 details the initial fees required to start a franchise. While Item 8 does not directly impact the initial franchise fee, it does state that Crave may collect allowances from approved suppliers, which may then be contributed to the advertising fund.
The initial fees for a Crave franchise include a $45,000 initial franchise fee for a restaurant and $30,000 for a food truck. There is also a grand opening marketing fee of $5,000 for a restaurant and $2,500 for a food truck. These fees are generally non-refundable. For multi-unit development agreements, the development fee is calculated based on the number and type of franchises (restaurants or food trucks) the franchisee commits to develop.
Item 8 specifies that franchisees must purchase or lease fixtures, furnishings, equipment, and décor items that conform to Crave's standards. Franchisees must also maintain sufficient supplies of approved food and beverage items. Crave can modify these standards and specifications and will notify franchisees of any changes. Crave also has the right to test samples of food and non-food items to ensure they meet the brand's standards. If a sample fails to conform to specifications or if the supplier hasn't been previously approved, Crave may require the franchisee to reimburse the testing costs. This ensures quality control and brand consistency, but it also means franchisees must adhere to Crave's approved supplier list, which could potentially affect their operating costs.