Under the Crave Franchise Agreement, what are the owners of a franchisee entity characterized as?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
You may be an individual, corporation, partnership, or other form of legal entity. If you are an entity, then under the Franchise Agreement, each of your owners would be characterized as Franchisee's Principals (referred to in this Disclosure Document as "your Principals"). The Franchise Agreement is signed by us, by you, and individually by each of your Principals. By signing the Franchise Agreement, your Principals agree to be individually bound by the obligations contained in the Franchise Agreement. Depending on the type of business activities in which you or your Principals may be involved, we may require you or your Principals to sign additional confidentiality and noncompetition agreements.
Source: Item 1 — THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 6–9)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, if a franchisee is a legal entity such as a corporation or partnership, the owners of that entity are characterized as 'Franchisee's Principals.' These principals are referred to as 'your Principals' within the document. This designation carries significant legal weight.
The Franchise Agreement must be signed not only by Crave and the franchisee entity but also individually by each of the franchisee's Principals. By signing, these Principals agree to be individually bound by the obligations outlined in the Franchise Agreement. This means that the Principals can be held personally liable for the entity's failure to meet the obligations of the agreement.
Furthermore, depending on the business activities of the franchisee or its Principals, Crave may require them to sign additional confidentiality and noncompetition agreements. This is a common practice in franchising to protect the franchisor's proprietary information and market position. Prospective franchisees should carefully review these agreements with legal counsel to understand the full extent of their obligations and potential liabilities. This ensures that all parties are aware of their responsibilities and the legal ramifications of the agreement.