Under what condition does a Crave franchisee pay 7% of gross sales as rent?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
sit, Other**
- 1. Rent Commencement Date: The rent commencement date shall be February 1st, 2025, or the first day the tenant is open for business, whichever is earlier.
- 2. Base Rent: Commencing on the rent commencement date, Sublessee shall pay Sublessor base rent monthly of five thousand dollars, ($5000), or shall sales exceed fifty thousand dollars for any month period of the first of the month to the last day of the month, Sublessee shall pay Sublessor, seven percent (7%) of gross sales. Rent is due on the first (1st) day of the month following the anniversary of the Rent Commencement Date.
- 3. Percentage Rent: Sublessee shall pay Sublessor monthly percentage rent as outlined, percentage rent shall be an amount equal to the product of (i) total monthly gross sales from the Subleased premises and (ii) the percentage rent rate.
Gross sales mean the aggregate selling price of all merchandise sold or delivered at or from any part of the Subleased premises and the charges for all services sold or performed at or from any part of the Subleased premises or at any other location if the merchandise is taken from the Subleased premises or the order for services taken at the Subleased premises. In addition, gross sales include sales and charges for cash or credit and credit card sales shall be included in gross sales regardless of collections. Gross sales exclude funds made by sublessee to its customers for merchandise originally included in gross sales but returned to sublessee, exchange for merchandise between stores of tenant where such exchanges are made solely for the convenient operation of Sublessee's business, and the amount of any city, county, or state sales tax on sales paid to a taxing authority by Sublessee, not by any vendor of Sublessee. A sale shall be deemed to be made in the Subleased premises if the merchandise or services are offered from the Subleased premises in person, via telephone, facsimile, Internet, or any other electronic means or filled at the Subleased premises or delivered from the Subleased premises.
"Percentage Rent Rate" means seven (7%) percent of monthly gross sales.
No later than the tenth (10) calendar day of each month, Sublessee shall provide a sales report as shown below ("Sales Report Form") to Sublessor via email to samantha@iwantcrave.com.
Sales Report Form:
| Address of Subleased Space | Store # | Month | Year | Gross Sales |
|---|---|---|---|---|
No later than the tenth (10th) calendar day of the month, Sublessee must send any percentage rent payment owed for the previous month by wiring the amount to the account below or such other account as may be deemed by sublessor in the future.
Bank Name: Chase Bank 2001 Nesconset Highway Lake Grove, NY 11755 ABA#: 021000021
Account Name: Crave WM Franchising LLC
Account #: 651103189
Sublessee shall also provide annually, no later than the last day of the fourth month following tenant fiscal year end, an independent certified accountant's report on applying agreed upon procedures conducted in accordance with the attestation standards (AT- Section 201) established by the American Institute of certified public accountants.
Source: Item 22 — CONTRACTS (FDD pages 62–63)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, a franchisee's rent structure involves a base rent and a percentage rent. The base rent is $5,000 per month. However, if a Crave location's gross sales exceed $50,000 for any month, the franchisee is required to pay 7% of gross sales as rent to Crave WM Franchising LLC. This rent is due on the first day of the month following the anniversary of the Rent Commencement Date.
Gross sales are defined as the total selling price of all merchandise sold or services performed at or from the subleased premises. This includes cash, credit, and credit card sales, regardless of collections. Exclusions from gross sales include refunds to customers for returned merchandise, exchanges between stores for operational convenience, and sales taxes paid to a taxing authority.
Crave requires franchisees to submit a sales report to the sublessor via email no later than the tenth calendar day of each month. Additionally, any percentage rent payment owed for the previous month must be wired to a specified account by the tenth of the month. Annually, franchisees must also provide an independent certified accountant's report on agreed-upon procedures, comparing the gross sales base used for percentage rent calculation to the specific general journal for the subleased location. Failure to submit this report may result in Crave facilitating the report at the franchisee's expense, along with a 10% administration fee.