According to the Crave confidentiality and non-competition agreement, what is considered a 'Competitive Business'?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
a. In order to protect the goodwill and unique qualities of the System, and in consideration for the disclosure to Covenantor of the Confidential Information, Covenantor further agrees and covenants that during the term of the Franchise Agreement, Covenantor shall not, for Covenantor or through, on behalf of or in conjunction with any person or entity:
(i) divert, or attempt to divert, any business or customer of any Crave outlet or of other franchisees in the System to any competitor, by direct or indirect inducement or otherwise, or
(ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in any restaurant or food service business featuring menu items which are the same or substantially similar to those offered in the Crave System.
b. In further consideration for the disclosure to Covenantor of the Confidential Information and to protect the goodwill and unique qualities of the System, Covenantor further agrees and covenants that, upon the termination of the Franchise Agreement and continuing for two (2) years thereafter, Covenantor shall not, for Covenantor or through, on behalf of or in conjunction with any person or entity:
(i) divert, or attempt to divert, any business or customer of any Crave outlet or of other franchisees in the Crave System to any competitor, by direct or indirect inducement or otherwise, or
(ii) participate as an owner, partner, director, officer, employee, or consultant or serve in any other managerial, operational or supervisory capacity in any restaurant or food service business featuring menu items which are the same or substantially similar to those offered in the Crave System within ten (10) miles of the Designated Territory or any Crave outlet location.
c. The parties acknowledge and agree that each of the covenants contained herein are reasonable limitations as to time, geographical area, and scope of activity to be restrained and do not impose a greater restraint than is necessary to protect the goodwill or other business interests of Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, the confidentiality and non-compete agreement outlines specific restrictions on activities that could be considered competitive. During the term of the Franchise Agreement, the Covenantor (which appears to refer to a party bound by the agreement, such as a spouse) cannot divert business from any Crave outlet to a competitor or participate in any food service business featuring menu items that are the same or substantially similar to those offered in the Crave system.
Post-termination, for a period of two years, the restrictions continue. The Covenantor is prohibited from diverting business away from Crave to competitors. They also cannot participate in a restaurant or food service business with similar menu items within ten miles of the Designated Territory or any Crave outlet location. These restrictions aim to protect Crave's goodwill and unique qualities of the system by preventing unfair competition using the franchisor's confidential information.
The agreement acknowledges that these covenants are reasonable in terms of time, geographical area, and scope, ensuring they do not impose a greater restraint than necessary to protect Crave's business interests. This is a fairly standard practice in franchising, as franchisors typically seek to protect their brand and trade secrets. Prospective franchisees should carefully review these non-compete terms to understand the limitations they and related parties will face both during and after the franchise agreement.