Is there a reasonable basis required for Crave to provide information about the actual financial performance of its franchised outlets?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor owned outlets, if there is a reasonable basis for the information, and if the information is included in the Franchise Disclosure Document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements
the information provided in this Item 19, for example, by providing information about performance at a particular location or under particular circumstances.
We do not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the franchisor's management by contacting Samantha Rincione at 159 N. Wolcott St. Suite 133 Casper, WY 82601, and (516)316-7420, the Federal Trade Commission, and the appropriate state regulatory agencies.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 56–57)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, if Crave chooses to provide information about the actual or potential financial performance of its franchised or company-owned outlets, it must have a reasonable basis for that information. This is in accordance with the FTC's Franchise Rule, which permits franchisors to share financial performance data if it's included in the Franchise Disclosure Document and has a reasonable foundation.
For a prospective Crave franchisee, this means that any financial performance representations made by Crave should be backed by credible data and analysis. This requirement aims to protect franchisees from misleading or unsubstantiated claims about potential earnings. However, Crave states that they do not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets.
Crave also clarifies that its employees or representatives are not authorized to make any financial performance representations, either orally or in writing. The only exception is if a prospective franchisee is purchasing an existing outlet, in which case Crave may provide the actual records of that specific outlet.
The FDD advises that if a prospective Crave franchisee receives any financial performance information or projections of future income from sources other than the FDD or the existing outlet's records, they should report it to Crave's management, the Federal Trade Commission, and the appropriate state regulatory agencies. This is to ensure that all financial information is vetted and compliant with franchise regulations.