Under what condition will Crave obtain insurance on behalf of a franchisee?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
| (1) | (2) | (3) | (4) |
|---|---|---|---|
| Fees (1) | Amount | Due Date | Remarks |
| Charges for "mystery shopper" quality control evaluation | Up to $300 | Monthly | See Note 6. The mystery shopper program will be separate from our programs for customer surveys and customer satisfaction audits (which may require you to accept coupons from participating customers for discounted or complimentary items). This fee may increase in the future. |
| ServSafe / TIPS (or similar) Certification | $150 per person or the then-current market rate | As needed | Each of your managers and other employees we designate must be ServSafe and TIPS or similarly certified. Payable to an approved supplier. |
| Insurance Premiums | Reimbursement of our costs, plus 10% administrative fee | On demand | If you do not obtain or maintain the required insurance coverages, we have the right (but not the obligation) to obtain insurance on your behalf and you must reim |
Source: Item 6 — OTHER FEES (FDD pages 12–19)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, Crave has the right, but not the obligation, to obtain insurance on behalf of a franchisee if the franchisee does not obtain or maintain the required insurance coverages. If Crave does obtain insurance for the franchisee, the franchisee is responsible for reimbursing Crave for the costs of the insurance, plus a 10% administrative fee. This reimbursement is due on demand.
This means that as a Crave franchisee, you are responsible for securing and maintaining the insurance coverage that Crave requires. Failure to do so gives Crave the option to step in and obtain the necessary insurance themselves. While this ensures that the business remains compliant and protected, it comes at an additional cost to you, as you will not only have to reimburse Crave for the insurance premiums but also pay a 10% administrative fee on top of that.
Franchisors often have specific insurance requirements to protect the brand and the entire franchise system. It is not uncommon for franchisors to have the right to obtain insurance on behalf of a franchisee who fails to maintain the required coverage, with the franchisee bearing the costs and an additional administrative fee. This policy ensures that all franchise locations meet minimum insurance standards, protecting the brand from potential liabilities.
Prospective Crave franchisees should carefully review the insurance requirements outlined in the FDD and Franchise Agreement to understand the types and amounts of coverage needed. Maintaining the required insurance is crucial to avoid the additional costs and potential complications that could arise if Crave has to step in and obtain insurance on your behalf.