How do the restrictions on suppliers for Crave (Item 8) relate to the initial investment costs (Item 7)?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
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, which directly impacts the initial investment costs detailed in Item 7. Crave requires franchisees to purchase or lease fixtures, furnishings, equipment (including point-of-sales systems), décor, signs, and related items that conform to their standards and specifications. These standards are found in Crave's Confidential Operations Manual. Franchisees must obtain written consent before deviating from these approved sources or installing non-compliant items.
Item 7 lists various expenditures that a franchisee will incur before opening. These include costs for signage, which range from $3,000 to $30,000 for a Restaurant and $0 to $250 for a Food Truck, equipment, furniture, and fixtures, which range from $70,000 to $160,000 for a Restaurant and is between $225,000 to $285,000 for a Truck with equipment, and point-of-sale and computer equipment, which range from $1,500 to $5,500 for a Restaurant and $1,000 to $2,500 for a Food Truck. Because Crave mandates that franchisees acquire these items from approved suppliers, the franchisee's ability to negotiate better prices or find alternative, potentially cheaper, sources is limited.
Crave retains the right to test samples of food and non-food items from the franchisee's inventory to ensure compliance with their standards. If a franchisee uses a non-approved supplier or if the samples fail to meet Crave's specifications, the franchisee may be required to reimburse Crave for the testing costs. This further emphasizes the importance of adhering to Crave's approved supplier list to avoid additional expenses and maintain quality standards. In some instances, Crave may contribute allowances received from approved suppliers to the advertising fund.