Besides injunctive relief, what other legal options does Crave have if I violate the non-compete agreement?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
d. Covenantor shall not at any time, directly or indirectly, do any act or omit to do any act that would or would likely be injurious or prejudicial to the goodwill associated with the System.
2. Covenants Not to Compete.
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)
Based on the 2025 Crave Franchise Disclosure Document, in addition to injunctive relief, Crave has further legal options if a Covenantor violates the non-compete agreement. The Covenantor agrees not to divert business from any Crave outlet to a competitor or participate in any food service business featuring similar menu items to Crave.
The agreement specifies that during the term of the Franchise Agreement, the Covenantor is prohibited from engaging in competitive activities. Post-termination, this restriction extends for two years within a ten-mile radius of the Designated Territory or any Crave outlet location. These covenants are acknowledged as reasonable limitations to protect Crave's goodwill and business interests.
Crave's ability to pursue legal remedies beyond injunctive relief would likely involve seeking monetary damages to compensate for losses resulting from the Covenantor's breach of the non-compete agreement. The specific remedies available would depend on the terms of the agreement and applicable law, but could include claims for lost profits, damage to brand reputation, and other consequential damages.
A prospective franchisee should consult with a legal professional to fully understand the implications of the non-compete agreement and the potential legal ramifications of violating its terms. It is important to assess the reasonableness and enforceability of the restrictions, as well as the potential financial exposure in the event of a breach.