Are there any restrictions on Crave's right to assign the Multi-Unit Development Agreement?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Multi Unit Development Agreement | Summary | |
|---|---|---|---|
| h. | "Cause" defined – non curable defaults | 9 | Failure to meet your minimum performance schedule; failure to comply with applicable laws; if all of your Franchised Businesses stop operating; unauthorized transfer; you make a material misrepresentation to us; conviction by you or your owners of an indictable offense; bankruptcy or insolvency; if a Franchise Agreement with us is terminated according to its terms (this is a cross-default provision) |
| i. | Multi-unit developer's obligations on termination/ non-renewal | 10 | You must stop selecting sites for Franchised Businesses, and you may not open any more Franchised Businesses |
| j. | Assignment of contract by franchisor | 11 | No restriction on our right to assign. However, no assignment will be made except to an assignee who, in our good faith judgment, is willing and able to assume our obligations under the Multi-Unit Development Agreement. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 50–56)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, Crave has the right to assign the Multi-Unit Development Agreement. Specifically, there are no restrictions on Crave's right to assign the agreement. However, Crave will only make an assignment to an assignee who, in Crave's good faith judgment, is willing and able to assume Crave's obligations under the Multi-Unit Development Agreement.
This means that while Crave can transfer the agreement to another party, they must ensure that the new party is capable of fulfilling the obligations outlined in the agreement. This protects the franchisee to some extent, as Crave cannot simply assign the agreement to an entity that is unable to support the franchise system.
This is a fairly standard clause in franchise agreements, as franchisors need the flexibility to transfer agreements in cases of mergers, acquisitions, or other business changes. However, the stipulation that the assignee must be capable of fulfilling the obligations provides some security for the franchisee. Prospective franchisees should still carefully review the Multi-Unit Development Agreement to understand all of Crave's obligations that would be transferred in such an assignment.