Must the transferee have sufficient financial resources and capital for operation of the Crave business?
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;
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 prospective transferee must demonstrate that they meet Crave's criteria for new franchisees. This includes showing that the transferee has sufficient financial resources and capital to operate the Crave business.
Crave will assess the transferee's financial resources and capital to ensure they can successfully manage the business. This evaluation is part of Crave's overall review of the transferee's qualifications, which also includes educational, managerial, and business standards, moral character, business reputation, and credit rating. Crave also considers the transferee's aptitude and ability to conduct the business, potentially evidenced by prior related business experience.
Crave aims to ensure that any new operator of a Crave franchise meets its standards, maintaining the brand's quality and reputation. By requiring transferees to meet these criteria, Crave seeks to minimize the risk of business failure due to inadequate financial resources or lack of business acumen. This protects both Crave's interests and the interests of other franchisees within the system.
In addition to demonstrating financial capability, the transferee must also meet other conditions, such as assuming all obligations under the Franchise Agreement, satisfying any outstanding debts, and executing Crave's standard form agreements. The transferee may also be required to renovate the Franchised Business to meet current system standards, all at the transferee's expense.