Does Crave have the right to approve transfers of the Multi-Unit Development Agreement by a multi-unit developer?
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. | Franchisor's right of first refusal to acquire multi unit developer's business | 11 | We have the right to match the offer. |
| o. | Franchisor's option to purchase multi-unit developer's business | Not applicable | Not applicable |
| p. |
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 retains the right to approve any transfers of the Multi-Unit Development Agreement by a multi-unit developer. This means that if a multi-unit developer wishes to transfer their rights and obligations under the agreement to another party, they must first obtain Crave's approval. However, Crave's consent cannot be unreasonably withheld.
Crave also 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 the agreement, having at least 25% of all required Franchised Businesses open or under construction, ensuring all debts are paid, and ensuring the buyer meets Crave's current criteria for new Multi-Unit Developers. Additionally, the buyer must execute a general release, pay a transfer fee, and personally guarantee all obligations under the agreement.
Furthermore, Crave also retains the right of first refusal, meaning they have the option to match any offer made by a potential buyer to acquire the multi-unit developer's business. This provision allows Crave to maintain control over who becomes a multi-unit developer within their franchise system and ensures that any new developer meets their standards and requirements.
Finally, the Multi-Unit Development Agreement will terminate upon the death or permanent disability of the multi-unit developer, unless the rights are transferred to a third party approved by Crave within six months. This ensures business continuity and allows Crave to maintain oversight of its franchise operations even in unforeseen circumstances.