Can Crave Cookies require franchisees to adhere to Crave Cookies' specifications when purchasing or leasing goods, services, supplies, fixtures, equipment, inventory, computer hardware/software, or real estate?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
ge-16-0">Generally
We have the right to require you to purchase or lease all goods, services, supplies, fixtures, equipment, inventory, computer hardware and software, real estate, or comparable items related to establishing or operating your business (1) either from us or our designee, or from suppliers approved by us, or (2) according to our specifications.
Specific Obligations
The following are our current specific obligations for purchases and leases:
A. Real Estate. Your business location is subject to our approval and must meet our specifications. You must use reasonable efforts to have your landlord sign or include our form of Rider to Lease Agreement (attached to this disclosure document as Exhibit D).
- B. Insurance. You must obtain insurance as described in the Franchise Agreement and in our Brand Standards Manual, which includes (i) "Special" causes of loss coverage forms, including fire and extended coverage, crime, vandalism, and malicious mischief, on all property of the Business, for full repair and replacement value (subject to a reasonable deductible); (ii) Business interruption insurance covering at least 12 months of income; (iii) Commercial General Liability insurance, including products liability coverage, and broad form commercial liability coverage, written on an "occurrence" policy form in an amount of not less than $1,000,000 single limit per occurrence and $2,000,000 aggregate limit, (iv) Business Automobile Liability insurance including owned, leased, non-owned and hired automobiles coverage in an amount of not less than $1,000,000, (you are not required to purchase a vehicle but if you purchase, lease, use non-owned or hired automobiles, you must obtain Business Automobile Liability insurance) and (v) Workers Compensation coverage as required by state law. Your policies (other than Workers Compensation) must list us and our affiliates as an additional insured, must include a waiver of subrogation in favor of us and our affiliates, must be primary and non-contributing with any insurance carried by us or our affiliates, and must stipulate that we receive 30 days' prior written notice of cancellation.
- C. Point-of-sale software and hardware, and related software and hardware. You must purchase (or lease) the point-of-sale software and hardware, and related software and hardware, that we specify. See Item 11 for more details.
- D. Equipment, Supplies, Inventory. You must purchase the equipment, supplies and inventory to be used in the operation of the franchised business. All of your kitchen equipment must meet our specifications and be purchased only from approved suppliers. All of your food, beverage, and other inventory purchases must meet our specifications and be purchased only from approved suppliers. Franchisee must purchase proprietary boxes, and items such as shirts, tumblers, gift cards and all other Crave merchandise from Crave Cookies, LLC. Purchasing products and services from us is exclusive and mandatory.
- E. Proprietary Boxes. You must purchase the boxes you will use in the operation of the franchised business from Crave Cookies Franchising, LLC.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 17–19)
What This Means (2025 FDD)
According to Crave Cookies' 2025 Franchise Disclosure Document, Crave Cookies has the right to mandate that franchisees purchase or lease all goods, services, supplies, fixtures, equipment, inventory, computer hardware and software, real estate, or comparable items related to establishing or operating their business according to Crave Cookies' specifications. These purchases or leases must be made either from Crave Cookies or its designee, or from suppliers approved by Crave Cookies. This control allows Crave Cookies to maintain uniformity and quality across all franchise locations.
Specifically, the business location (real estate) is subject to Crave Cookies' approval and must meet their specifications. Franchisees are expected to make reasonable efforts to have their landlord sign Crave Cookies' form of Rider to Lease Agreement. All kitchen equipment, food, beverage, and other inventory purchases must meet Crave Cookies' specifications and be purchased only from approved suppliers. Franchisees must purchase proprietary boxes, shirts, tumblers, gift cards, and all other Crave merchandise directly from Crave Cookies, LLC, making these purchases exclusive and mandatory.
Crave Cookies estimates that required purchases and leases to establish the business account for 50% to 80% of the total establishment costs. Similarly, they estimate that the required purchases and leases of goods and services to operate the business also constitute 50% to 80% of the total operational purchases and leases. Crave Cookies negotiates purchase arrangements with suppliers, including price terms, for the benefit of franchisees. For example, they currently have negotiated purchase contracts for items such as chocolate, butter and containers, which save franchisees up to 46%.
If a franchisee wishes to use a supplier not on Crave Cookies' approved list, they must request written approval. Crave Cookies will grant or revoke approvals based on criteria such as the supplier's capacity, quality, financial stability, reputation, and reliability, including inspections, product testing, and performance reviews. The criteria for approving suppliers are not disclosed to franchisees. Crave Cookies will provide written notification of approval or disapproval within 30 days after receiving the request. Crave Cookies may also derive revenue from these required purchases and leases by franchisees. In the prior fiscal year, Crave Cookies' total revenue was $2,413,050, with $632,828 coming from required purchases and leases of products and services by franchisees.