Under what circumstances can Crave exercise its Step-In Rights to operate my franchise?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
equipment related thereto. We may exercise such option at or within thirty (30) days after either termination or (subject to any existing right to a successor option) expiration of this Agreement. In the event we do not elect to exercise our option to acquire the lease or sublease for the Franchised Business premises or do not have such option, you shall make such modifications or alterations to the Franchised Business premises as are necessary to distinguish the appearance of the Franchised Business premises from that of other Crave restaurants operating under the System and shall make such specific additional changes as we may reasonably request. If you fail or refuse to comply with the requirements of this Section 18.11, we shall have the right to enter upon the premises of the Franchised Business, without being guilty of trespass or any other crime or tort, to make or cause to be made such changes as may be required, at your expense, which expense you agree to pay upon demand. Notwithstanding the provisions of this Section 18.11 to the contrary, in the event the lease is assigned to us, we hereby indemnify and hold harmless you and any guarantors under said lease, for any breach by us or our successors or assigns from any liability arising out of the lease for the Franchised Business premises from and after the date of the assignment of lease.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Crave has specific step-in rights related to the appearance of the franchised business premises after the termination or expiration of the franchise agreement. If a franchisee fails to make required modifications to distinguish the premises from other Crave restaurants, Crave has the right to enter the premises and make those changes at the franchisee's expense.
Specifically, after the termination or expiration of the franchise agreement, if Crave does not exercise its option to acquire the lease or sublease for the franchised business premises, the franchisee must modify the premises to differentiate its appearance from other Crave restaurants. These modifications must comply with Crave's reasonable requests. If the franchisee fails to comply with these requirements, Crave has the right to enter the premises and make the necessary changes at the franchisee's expense, which the franchisee agrees to pay upon demand.
This provision ensures that after a franchise agreement ends, the former franchisee cannot continue to operate a similar business that might be confused with a Crave restaurant. It protects Crave's brand and image by ensuring a clear distinction between former and current Crave locations. The franchisee bears the financial responsibility for these modifications, and failure to comply allows Crave to take direct action to protect its brand standards.
It is important to note that this step-in right is limited to the specific situation of modifying the premises after termination or expiration of the franchise agreement. The FDD does not detail any other circumstances under which Crave would have the right to step in and operate the franchise. A prospective franchisee should seek clarification from Crave regarding any other potential step-in rights not explicitly mentioned in this section.