Does Crave have the right to collect allowances, rebates, credits, incentives, or benefits based on a Crave franchisee's purchases?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
We have the right to collect and retain any and all allowances, rebates, credits, incentives, or benefits (collectively, "Allowances") offered by manufacturers, suppliers, and distributors to you, to us, or to our affiliates based upon your purchases of products and services from manufacturers, suppliers, and distributors. We or our affiliates will have all your right, title, and interest in and to any and all of these Allowances. We or our affiliates may collect and retain any or all these Allowances without restriction (unless otherwise instructed by the manufacturer, supplier, or distributor). We may also choose to contribute these Allowances to the Brand Development Fund, but if we do so it does not reduce or eliminate your obligation to pay the brand development fee. For the fiscal year ended December 31, 2024, neither we nor our affiliates earned revenue from Allowances.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 26–30)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, Crave retains the right to collect allowances, rebates, credits, incentives, or benefits from manufacturers, suppliers, and distributors based on a franchisee's purchases of products and services. These allowances are referred to as "Allowances" in the FDD. Crave or its affiliates have the right to collect and retain these Allowances without restriction, unless the manufacturer, supplier, or distributor instructs otherwise.
Crave also has the option to contribute these Allowances to the Brand Development Fund. However, if Crave chooses to contribute the Allowances to the fund, it does not reduce or eliminate the franchisee's obligation to pay the brand development fee. This means that franchisees are still responsible for paying the brand development fee, even if Crave receives Allowances from suppliers.
For the fiscal year ended December 31, 2024, Crave states that neither they nor their affiliates earned revenue from Allowances. This indicates that, at least for that specific period, Crave did not receive any financial benefits from these types of arrangements. However, the franchise agreement still allows them to collect these Allowances in the future. This is a common practice in franchising, where franchisors negotiate with suppliers to receive volume discounts or rebates based on the collective purchasing power of the franchise system.