Can Crave unreasonably withhold consent to a Restricted Transfer?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
14.2.2 If you wish to transfer all or part of your interest in the Franchised Business, any of the Franchised Business' material assets (except as provided in Section 14.2.1 above) or this Agreement,
or if you or a Principal wishes to transfer or permit a transfer of any ownership interest in you, then in each such case (any or all of which are referred to in this Article 14 as a "Restricted Transfer"), transferor and the proposed transferee shall apply to us for our consent. We shall not unreasonably withhold our consent to a Restricted Transfer. We may, in our sole discretion, require any or all of the following as conditions of our approval:
(a) All of the accrued monetary obligations of you or any of your affiliates and all other outstanding obligations to us arising under this Agreement or any other agreement shall have been satisfied in a timely manner and you shall have satisfied all trade accounts and other debts, of whatever nature or kind, in a timely manner;
(b) You and your affiliates shall not be in default of any provision of this Agreement, any amendment hereof or successor hereto, or any other agreement between you or any of your affiliates and us or any of our affiliates at the time of transaction;
(c) The transferor and its principals (if applicable) shall have executed a general release, in a form reasonably satisfactory to us, of any and all claims against us, our officers, directors, shareholders, partners, agents, representatives, independent contractors, servants and employees of each of them, in their corporate and individual capacities, including, without limitation, claims arising under this Agreement and federal, state and local laws, rules and regulations;
(d) The transferee shall demonstrate to our reasonable satisfaction that transferee meets the criteria considered by us when reviewing a prospective franchisee's application for a franchise, including, but not limited to, our educational, managerial and business standards; transferee's good moral character, business reputation and credit rating; transferee's aptitude and ability to conduct the business franchised herein (as may be evidenced by prior related business experience or otherwise); transferee's financial resources and capital for operation of the business; and the geographic proximity and number of other Franchised Businesses owned or operated by transferee;
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, Crave will not unreasonably withhold consent to a Restricted Transfer. However, Crave may require certain conditions to be met before approving a transfer.
These conditions include ensuring all monetary and outstanding obligations to Crave and its affiliates are satisfied in a timely manner, and that neither the franchisee nor their affiliates are in default of any agreement with Crave. Additionally, the transferor and its principals must execute a general release of claims against Crave, its officers, and employees. The transferee must also demonstrate that they meet Crave's criteria for prospective franchisees, including educational, managerial, and business standards, good moral character, credit rating, aptitude, financial resources, and the geographic proximity and number of other Franchised Businesses they own or operate.
These stipulations are typical in franchising, as franchisors want to ensure that any new franchisee meets their standards and will not negatively impact the brand. The release of claims protects Crave from potential legal issues arising from the transfer. Meeting these conditions is crucial for a Crave franchisee looking to transfer their business, as failure to do so could result in Crave withholding its consent.