What is the Crave Sublessor's right regarding accelerating payments under the Sublease?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
| Crave WM Franchising LLC, a Wyoming limited liability company ("Sublessor"), | |
|---|---|
| executes this Sublease (the "Sublease") herewith between Sublessor and | |
| , a | limited liability |
| company ("Sublessee"), covering certain premises, situated in the City of | in the state of, within the |
| Walmart location located at The undersigned, jointly and | |
| severally (hereinafter referred to individually and collectively as "Guarantor", whether one or | |
| more) hereby jointly and severally guarantee unto Sublessor the payment and performance of (i) all | |
| of the rental and other sums or charges which may ever become due and payable by Tenant under | |
| the Lease, including, without limitation, rental that becomes due and payable by reason of the | |
| exercise of any power to accelerate granted to Sublessor under the Sublease and any damages or | |
| other sums that become payable on account of any default by Sublessee under the Sublease, and (ii) | |
| all of the other obligations, liabilities and duties of Sublessee under the Sublease (the rental, other | |
| sums and charges and other obligations, liabilities and duties described in the foregoing clauses (i) | |
| and (ii) being hereinafter collectively referred to as the "Obligations"). For the purposes hereof, the | |
| term "Sublessee" shall include any assignee of Sublessee, | and the term "Sublease" shall include any |
| amendment of the Sublease effected by Sublessor and Sublessee, with or | without the consent or |
| knowledge of Guarantor. |
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, the Sublessor has the right to accelerate payments under the Sublease. Specifically, if the Sublessee defaults, the Sublessor can demand immediate payment of all remaining rent and charges due for the entire term of the Sublease. This is made possible by the guarantor's agreement to cover rental payments that become due because of the Sublessor's power to accelerate payments.
This acceleration clause is significant for a prospective Crave franchisee because it means that if the franchisee defaults on the Sublease, they could be liable for the total remaining rent, not just the overdue amount. This could create a substantial financial burden. The guarantor, who is guaranteeing the franchisee's obligations, is also liable for these accelerated payments. This arrangement protects the Sublessor (Crave WM Franchising LLC) by ensuring they receive all payments due under the Sublease, even if the franchisee fails to meet their obligations.
It is important for a prospective Crave franchisee to fully understand the terms of the Sublease and the Guaranty, including the conditions under which acceleration can occur. Franchisees should also carefully consider the financial implications of the acceleration clause and ensure they have sufficient resources to cover the potential liability. Furthermore, franchisees should be aware that the Guaranty remains in effect even if the Sublessee enters bankruptcy or reorganization, meaning the obligation to pay continues despite such proceedings.