How are royalty fees addressed in the Crave Franchise Agreement?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
4.2 Royalty Fees
- 4.2.1 During the term of this Agreement, you shall pay to us, in partial consideration for the rights herein granted, a continuing weekly royalty fee of eight percent (8%) of Gross Sales ("Royalty Fee"). Such Royalty Fee shall be due and payable on Wednesday of each week based on the Gross Sales for the preceding week ending Sunday, provided that such day is a business day. If the date on which such payments would otherwise be due is not a business day, then payment shall be due on the next business day.
- 4.2.2 Each such Royalty Fee shall be preceded by a royalty report itemizing the Gross Sales for the preceding week ending Sunday ("Royalty Report") and any other reports required hereunder. Notwithstanding the foregoing, you shall provide us with such Royalty Report by Tuesday of each week by modem or, if not reasonably available, by facsimile transmission or such other method of delivery as we may reasonably direct. As stated herein, we have the right to poll your point-of-sale system directly to obtain such Gross Sales information, but this does not diminish your responsibility to provide us with the required Royalty Report.
- 4.2.3 If any state imposes a sales or other tax on the Royalty Fees, then we have the right to collect this tax from you.
- 4.2.4 If a state or local law in which the Franchised Business is located prohibits or restricts in any way your ability to pay and our ability to collect Royalty Fees or other amounts based on Gross Sales derived from the sale of alcoholic beverages at the Franchised Business then we and you shall increase the percentage rate for calculating Royalty Fees, and change the definition of Gross Sales to exclude sales of alcoholic beverages, in a manner such that the Royalty Fees to be paid by you, and received by us, shall be equal to such amounts as you would have been required to pay, and we would have received, if sales from alcoholic beverages were included in Gross Sales.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, franchisees must pay a continuing weekly royalty fee. This fee is 8% of Gross Sales. The Royalty Fee is due each Wednesday for the previous week ending on Sunday, assuming that Wednesday is a business day. If not, the payment is due the next business day.
Each royalty payment must be accompanied by a royalty report that itemizes the Gross Sales for the week ending the previous Sunday. This report is due every Tuesday via modem, fax, or another method directed by Crave. Crave retains the right to directly poll the franchisee's point-of-sale system to obtain Gross Sales information; however, the franchisee is still responsible for providing the Royalty Report.
If any state imposes a sales or other tax on the Royalty Fees, Crave has the right to collect this tax from the franchisee. Additionally, if a state or local law prohibits or restricts the ability to pay and collect Royalty Fees based on Gross Sales derived from the sale of alcoholic beverages, Crave and the franchisee will adjust the percentage rate for calculating Royalty Fees and change the definition of Gross Sales to exclude sales of alcoholic beverages. This adjustment ensures that Crave receives the same amount it would have received if sales from alcoholic beverages were included in Gross Sales.