Can Crave Cookies Franchising reject a proposed transfer for any reason?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
ranchisee.** Franchisee acknowledges that the rights and duties set forth in this Agreement are personal to Franchisee and that Crave Cookies Franchising entered into this Agreement in reliance on Franchisee's business skill, financial capacity, personal character, experience, and business ability. Franchise Fees are not refundable, as stated in Section 4.1 of this agreement. Franchisee may not transfer an undeveloped territory. Crave Cookies Franchising may reject any proposed transfer for any reason it sees fit. Accordingly, Franchisee shall neither conduct nor undergo a Transfer without providing Crave Cookies Franchising at least 60 days prior notice of the proposed Transfer, and without obtaining Crave Cookies Franchising's consent. In granting any such consent, Crave Cookies Franchising may impose conditions, including but not limited to the following:
- (i) Crave Cookies Franchising receives a transfer fee equal to $10,000 plus any broker fees, legal fees and other out-of-pocket costs incurred by Crave Cookies Franchising; (The $10,000 fee does not apply in the State of Washington but Crave Cookies Franchising, LLC is still entitled to broker fees and other out-of-pocket costs incurred by Crave Cookies Franchising, LLC.);
- (ii) the proposed assignee and its owners have completed Crave Cookies Franchising's franchise application processes, meet Crave Cookies Franchising's then-applicable standards for new franchisees, and have been approved by Crave Cookies Franchising
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies's 2025 Franchise Disclosure Document, Crave Cookies Franchising has broad discretion to reject a proposed transfer of a franchise. The FDD explicitly states that Crave Cookies Franchising "may reject any proposed transfer for any reason it sees fit." This gives Crave Cookies Franchising significant control over who becomes a franchisee within their system.
This clause has important implications for franchisees who may wish to sell their business in the future. Even if a franchisee finds a willing and qualified buyer, Crave Cookies Franchising can still reject the transfer for any reason. This could potentially limit the franchisee's ability to recoup their investment or realize the full value of their business.
However, the FDD also outlines conditions that Crave Cookies Franchising may impose when granting consent for a transfer. These conditions include the payment of a $10,000 transfer fee (though this fee does not apply in Washington state), plus broker fees, legal fees, and other out-of-pocket costs incurred by Crave Cookies Franchising. The proposed assignee must also meet Crave Cookies Franchising's standards for new franchisees, not be a competitor, and execute Crave Cookies Franchising's current franchise agreement, which may contain materially different provisions.
Prospective franchisees should carefully consider this transfer provision and understand the potential limitations it places on their ability to sell their Crave Cookies franchise. It would be prudent to discuss with Crave Cookies Franchising what specific factors they consider when evaluating a proposed transfer to better understand the likelihood of approval in different scenarios.