What rights does Crave retain when assigning the franchise agreement?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
You expressly affirm and agree that we may sell our assets, our rights to the Marks or to the System outright to a third party; may go public; may engage in a private placement of some or all of our securities; may merge, acquire other corporations, or be acquired by another corporation; may undertake a refinancing, recapitalization, leveraged buyout or other economic or financial restructuring; and, with regard to any or all of the above sales, assignments and dispositions, you expressly and specifically waive any claims, demands or damages arising from or related to the loss of said Marks (or any variation thereof) and/or the loss of association with or identification of "CRAVE Franchising, LLC" as Franchisor. Nothing contained in this Agreement shall require us to remain in the food service business or to offer the same products and services, whether or not bearing the Marks, in the event that we exercise our right to assign our rights in this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, Crave retains specific rights even when assigning the franchise agreement. Crave explicitly states that they "may sell our assets, our rights to the Marks or to the System outright to a third party; may go public; may engage in a private placement of some or all of our securities; may merge, acquire other corporations, or be acquired by another corporation; may undertake a refinancing, recapitalization, leveraged buyout or other economic or financial restructuring".
Crave also includes a waiver where the franchisee "expressly and specifically waive[s] any claims, demands or damages arising from or related to the loss of said Marks (or any variation thereof) and/or the loss of association with or identification of 'CRAVE Franchising, LLC' as Franchisor." This means that if Crave is acquired or sells its rights, franchisees cannot sue for damages related to the change in brand ownership or identity.
Furthermore, the franchise agreement does not require Crave to remain in the food service business or offer the same products and services if they choose to assign their rights in the agreement. This provides Crave with significant flexibility in its business operations and potential exit strategies, while placing the onus on the franchisee to adapt to potential changes in brand ownership, products, or services. This is a notable point for prospective franchisees to consider, as it highlights the potential for significant changes to the franchise system beyond their control.