How do the restrictions on suppliers for Crave (Item 8) relate to the lack of financing (Item 10)?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
You must purchase or lease your Food Truck from our designated supplier, Master Chef Mobile Kitchens located in Hicksville, New York. Imperial Dade is the designated supplier of our logo'd paper products. None of our officers has an ownership interest in any of the above-named suppliers.
You must purchase or finance your Food Truck from our designated supplier, and it will come fully outfitted with all the equipment and signage we require and have approved for use with your Food Truck. If you choose to finance your Food Truck through our designated supplier, we will not review or approve the purchase contract. You are required to provide a down payment of 10% to 40% (determined by the designated supplier depending on your credit history) to the designated supplier before they begin the buildout of your Food Truck. We and our affiliates do not receive any consideration for the purchase and/or financing of your Food Truck.
We may establish strategic alliances or preferred vendor programs with suppliers that are willing to supply some products, equipment, or services to some or all the restaurants and food trucksin our System.
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, Item 8 details significant restrictions on where franchisees can source products and services, while Item 10 (not provided in the excerpts) typically covers financing options. The FDD excerpts provided do not explicitly link supplier restrictions to the lack of financing. However, Item 8 states that franchisees must purchase or lease the Food Truck from Crave's designated supplier, Master Chef Mobile Kitchens, and logo'd paper products from Imperial Dade. If a franchisee chooses to finance their Food Truck through the designated supplier, Crave will not review or approve the purchase contract. This indicates that while Crave mandates specific suppliers, they do not involve themselves in the financing terms arranged between the franchisee and the supplier.
The restrictions on suppliers mean that franchisees have limited or no ability to negotiate better prices or terms with alternative suppliers. This could potentially increase their initial and ongoing costs. For example, franchisees are required to provide a down payment of 10% to 40% to the designated supplier for the Food Truck, with the exact percentage determined by the franchisee's credit history. The franchisor may establish strategic alliances or preferred vendor programs with suppliers that are willing to supply some products, equipment, or services to some or all the restaurants and food trucks in the Crave system.
Since the FDD excerpts do not include Item 10, it's unclear whether Crave offers any direct or indirect financing options. The absence of franchisor-provided financing, combined with mandatory supplier purchases, could place a greater financial burden on franchisees. Prospective franchisees should inquire with Crave about available financing options, the reasons for supplier restrictions, and how these restrictions might impact their overall investment and profitability. Understanding these factors is crucial for assessing the financial feasibility of a Crave franchise.