Can the Royalty Fee and Brand Development Fee change when a Crave franchise is transferred?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
ransfer, all obligations, covenants and agreements contained in this Agreement; and, if transferee is a corporation or a partnership, transferee's shareholders, partners or other investors, as applicable, shall execute such agreement as transferee's principals and guarantee the performance of all such obligations, covenants and agreements;
- (f) The transferee shall execute, for a term ending on the expiration date of this Agreement and with such successor terms as may be provided by this Agreement, the standard form franchise agreement then being offered to new System franchisees and other ancillary agreements as we may require for the Franchised Business, which agreements shall supersede this Agreement and its ancillary documents in all respects and the terms of which agreements may differ from the terms of this Agreement, including, without limitation, the then-current Royalty Fee and Brand Development Fee (as applicable); provided, however, that the transferee shall not be required to pay any initial franchise fee;
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, the Royalty Fee and Brand Development Fee can change when a franchise is transferred. Specifically, the transferee (the person or entity buying the franchise) is required to execute the standard form franchise agreement then being offered to new Crave franchisees. This new agreement will supersede the original agreement in all respects.
This means that the terms of the new agreement, including the Royalty Fee and Brand Development Fee, may differ from the terms of the original agreement. However, the transferee is not required to pay any initial franchise fee. This stipulation ensures that Crave can update its franchise agreements with new franchisees to reflect current business practices and market conditions.
In practical terms, a prospective buyer needs to be aware that the financial terms of the franchise, particularly the ongoing Royalty Fee and Brand Development Fee, could be different under a new franchise agreement. The FDD states that the transferee must renovate, modernize, and upgrade the Franchised Business to conform to the then-current standards. The transferee will also pay a transfer fee of $5,000. Therefore, it is essential to carefully review the current franchise agreement offered to new franchisees to understand the potential financial implications of a transfer.