What warranties and representations is Crave entitled to when purchasing a franchised business?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
14.8.1 At any time during the term of this Agreement, we shall have the right to purchase the Franchised Business from you by giving you written notice that we are exercising our option to purchase the Franchised Business pursuant to this Section 14.8. The purchase of the Franchised Business shall include, without limitation, leasehold improvements, equipment, furniture, fixtures, signs, inventory and the lease or sublease for the Accepted Location. We shall have the unrestricted right to assign this option to purchase. We or our assignee shall be entitled to all customary warranties and representations given by the seller of a business including, without limitation, representations and warranties as to (a) ownership, condition and title to assets; (b) liens and encumbrances relating to the assets; (c) validity of contracts inuring to us or affecting the assets; and (d) contingent or other liabilities.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, if Crave exercises its right to purchase a franchised business from a franchisee, it is entitled to customary warranties and representations from the seller. This purchase option is available to Crave at any time during the term of the Franchise Agreement.
The warranties and representations that Crave is entitled to include assurances regarding (a) ownership, condition, and title to assets; (b) liens and encumbrances relating to the assets; (c) validity of contracts inuring to Crave or affecting the assets; and (d) contingent or other liabilities. The purchase encompasses leasehold improvements, equipment, furniture, fixtures, signs, inventory, and the lease or sublease for the location.
This clause protects Crave by ensuring they receive clear title and accurate information about the business's assets and liabilities if they choose to buy it back. It also allows Crave to assign this purchase option to another party. This does not dictate the purchase price, but rather the assurances Crave receives as part of the transaction.