Must the transferee meet Crave's educational standards?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
replacing, upgrading or otherwise dealing with such assets as required or permitted by this Agreement), without our prior written consent. Any purported assignment or transfer, by operation of law or otherwise, made in violation of this Agreement shall be null and void and shall constitute a material event of default under this Agreement.
14.2.2 If you wish to transfer all or part of your interest in the Franchised Business, any of the Franchised Business' material assets (except as provided in Section 14.2.1 above) or this Agreement,
or if you or a Principal wishes to transfer or permit a transfer of any ownership interest in you, then in each such case (any or all of which are referred to in this Article 14 as a "Restricted Transfer"), transferor and the proposed transferee shall apply to us for our consent. We shall not unreasonably withhold our consent to a Restricted Transfer. We may, in our sole discretion, require any or all of the following as conditions of our approval:
- (a) All of the accrued monetary obligations of you or any of your affiliates and all other outstanding obligations to us arising under this Agreement or any other agreement shall have been satisfied in a timely manner and you shall have satisfied all trade accounts and other debts, of whatever nature or kind, in a timely manner;
- (b) You and your affiliates shall not be in default of any provision of this Agreement, any amendment hereof or successor hereto, or any other agreement between you or any of your affiliates and us or any of our affiliates at the time of transaction;
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, if a franchisee wishes to transfer their interest in the franchised business, the potential transferee must meet certain criteria. One of the conditions for Crave's approval of the transfer is that the transferee demonstrates that they meet the criteria considered when reviewing a prospective franchisee's application. This includes Crave's educational, managerial, and business standards.
Specifically, Crave will assess whether the transferee meets their standards for a new franchisee. This assessment includes not only educational standards, but also the transferee's good moral character, business reputation, and credit rating. Crave will also evaluate the transferee's aptitude and ability to conduct the business, their financial resources, and the geographic proximity and number of other Crave businesses they own or operate.
In practice, this means that if a Crave franchisee wants to sell their franchise, the person or entity buying it must be approved by Crave and meet their current standards for new franchisees. This protects the Crave brand by ensuring that all franchisees meet a minimum level of competence and have the resources to operate the business successfully. The transferee will also need to pay a transfer fee of $5,000.