Is the transferee required to pay an initial franchise fee when taking over a Crave franchise?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
- (f) The transferee shall execute, for a term ending on the expiration date of this Agreement and with such successor terms as may be provided by this Agreement, the standard form franchise agreement then being offered to new System franchisees and other ancillary agreements as we may require for the Franchised Business, which agreements shall supersede this Agreement and its ancillary documents in all respects and the terms of which agreements may differ from the terms of this Agreement, including, without limitation, the then-current Royalty Fee and Brand Development Fee (as applicable); provided, however, that the transferee shall not be required to pay any initial franchise fee;
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, a transferee is not required to pay an initial franchise fee when taking over an existing franchise. However, the transferee must execute the standard form franchise agreement then being offered to new Crave franchisees, which will supersede the original agreement. The terms of this new agreement may differ from the original, including potential changes to the Royalty Fee and Brand Development Fee.
While the initial franchise fee is waived, the transferee is responsible for several other costs and obligations. They must renovate and upgrade the Franchised Business to meet Crave's current system standards. The transferee also needs to ensure that they, their General Manager, and other relevant personnel complete any required training programs. Additionally, the transferee is responsible for a $5,000 transfer fee to cover Crave's costs for reviewing the transfer application, including training, legal, and accounting fees.
It's important to note that the transfer is not effective until Crave receives all executed transfer documents and provides written consent. Crave will assess the transferee's qualifications, including financial strength, business acumen, and reputation. The transferee must also assume all obligations of the original franchisee and execute ancillary agreements required by Crave.
This policy balances the need for Crave to maintain its brand standards and recover costs associated with the transfer process, while also making franchise transfers more accessible by waiving the initial franchise fee. Prospective transferees should carefully review the current franchise agreement and associated fees to understand their financial obligations fully.