What sections of the Crave Multi-Unit Development Agreement (MUDA) pertain to fees?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 5: INITIAL FEES]
Multi-Unit Development Agreement: If you qualify to develop and operate multiple Crave Franchised Businesses, then you will pay to us a development fee equal to 100% of the initial franchise fee for the first Franchised Business you commit to develop under the Multi-Unit Development Agreement plus 50% of the initial franchise fee for each additional Franchised Business you commit to develop under the Multi-Unit Development Agreement. You may commit to develop any combination of Restaurants, Food Trucks, and Express Restaurants under a Multi-Unit Development Agreement. For example, if you commit to develop three Food Trucks, the development fee is calculated as $30,000 + (2 x $15,000 = $30,000) = $60,000. If you commit to develop three Restaurants, the development fee is calculated as $45,000 + (2 x $20,000 = $40,000) = $85,000. If you commit to develop a minimum of three units in some other combination of Food Trucks and Restaurants, the development fee will be an amount between $60,000 and $85,000. The development fee is fully earned by us when received and is not refundable or credited against any future fees payable by you under any Franchise Agreement or otherwise.
You will sign the Franchise Agreement for the first Franchised Business at the same time you sign the Multi-Unit Development Agreement, and we will apply a portion of the development fee to pay the initial franchise fee for the first Franchised Business in full. For each additional Franchised Business you will develop under the Multi-Unit Development Agreement, we will apply a credit of 50% of the amount of the initial franchise fee for that Franchised Business, and the balance of the initial franchise fee due for that Franchised Business is payable in a lump sum when you sign the Franchise Agreement for that Franchised Business. The development fee is imposed uniformly on all multi-unit developers and is not refundable under any circumstances.
There are no other purchases from or payments to us or any affiliate of ours that you must make before your Franchised Business opens for business.
The fees section of the Multi-Unit Development Agreement is amended to state: "Based upon the franchisor's financial condition, the Maryland Securities Commissioner has required a financial assurance.
Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the franchise agreement.
In addition, all development fees and initial payments by area developers shall be deferred until the first franchise under the development agreement opens."
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 30–31)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, Item 5 addresses the initial fees associated with the Multi-Unit Development Agreement (MUDA). Specifically, if a franchisee qualifies to develop and operate multiple Crave franchises, they must pay a development fee. This fee is equivalent to 100% of the initial franchise fee for the first franchise they commit to developing under the MUDA, plus 50% of the initial franchise fee for each additional franchise. This development fee covers any combination of Restaurants, Food Trucks, and Express Restaurants. For example, committing to three Food Trucks would incur a $60,000 fee, while three Restaurants would cost $85,000.
The FDD specifies that the development fee is fully earned by Crave upon receipt and is non-refundable. It also cannot be credited against any future fees payable under any Franchise Agreement. When signing the MUDA, the franchisee also signs the Franchise Agreement for the first franchise, and a portion of the development fee is used to cover the initial franchise fee for that first location. For each subsequent franchise developed under the MUDA, Crave will credit 50% of the initial franchise fee, with the remaining balance due when the Franchise Agreement for that location is signed.
Additionally, the Maryland Addendum in Item 23 amends the fees section of the Multi-Unit Development Agreement. It states that due to Crave's financial condition, the Maryland Securities Commissioner requires a financial assurance. As a result, all initial fees and payments owed by franchisees are deferred until Crave completes its pre-opening obligations under the franchise agreement. Furthermore, all development fees and initial payments by area developers are deferred until the first franchise under the development agreement opens. This addendum ensures that franchisees in Maryland do not pay fees until Crave has fulfilled its initial obligations.