Under what conditions can Crave terminate the territorial protection provision of the Multi-Unit Development Agreement?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
sites or municipalities which do not meet our criteria for you to meet the Minimum Performance Schedule.
Except as described below, during the term of the Multi-Unit Development Agreement, we and our affiliates will not operate or grant a franchise for the operation of Restaurants or Food Trucks to be located or to operate within the Development Area. However, we have the right to terminate this provision if you are not in full compliance with all the terms and conditions of the Multi-Unit Development Agreement and all of the Franchise Agreements signed under it. Your territorial rights to the Development Area may or may not, in our discretion, include the right to develop Restaurants or operate Food Trucks at any Non-Traditional Sites. Because we have the right to develop Restaurants or operate Food Trucks at Non-Traditional Sites, as described above, your Development Area is not exclusive to you.
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
Source: Item 12 — TERRITORY (FDD pages 42–46)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, Crave can terminate the territorial protection provision of the Multi-Unit Development Agreement if the franchisee is not in full compliance with all the terms and conditions of the Multi-Unit Development Agreement and all of the Franchise Agreements signed under it. This means that a multi-unit franchisee must adhere to all stipulations outlined in both the overarching development agreement and the individual franchise agreements for each Crave location they operate. Failure to comply with any of these terms puts the franchisee at risk of losing the territorial protections afforded by the Multi-Unit Development Agreement.
To maintain rights under the Multi-Unit Development Agreement, the franchisee must have the cumulative number of Franchised Businesses open and operating by the dates agreed upon in the Minimum Performance Schedule. Failure to do so will be grounds for either a loss of territorial exclusivity or the termination of the Multi-Unit Development Agreement. This provision emphasizes the importance of meeting development milestones and maintaining operational standards across all franchised locations within the designated area.
After the final Franchised Business under the Minimum Performance Schedule has opened, if Crave believes that it is desirable to establish additional Franchised Businesses within the Development Area, and if the franchisee complied with the terms of their Multi-Unit Development Agreement and are in compliance with their Franchise Agreements, Crave will offer the franchisee the right to develop these additional Franchised Businesses. The franchisee must exercise this option, in full, within 60 days of Crave's notice. If the franchisee does not exercise or declines this right of first refusal, Crave will have the right to sell these development rights to another multiunit developer or to develop the Restaurants or Food Trucks themselves. This clause highlights the importance of ongoing compliance and the potential for further expansion opportunities, as well as the risk of losing those opportunities if the franchisee does not act promptly.