Besides the operation of a Crave Franchised Business, what activities are franchisees prohibited from engaging in outside of their Designated Territory?
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.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, franchisees are restricted from certain competitive activities outside their designated territory, both during the franchise agreement term and for a period of two years after termination or expiration. Specifically, during the term of the Franchise Agreement, franchisees are prohibited from diverting or attempting to divert business or customers from any Crave outlet to a competitor, or participating in any restaurant or food service business featuring similar menu items to Crave.
Post-termination, for a period of two years, franchisees are restricted from diverting business from Crave outlets or participating in a similar food service business within ten miles of the Designated Territory or any Crave outlet location. These restrictions aim to protect Crave's goodwill and confidential information by preventing franchisees from using their knowledge of the Crave system to unfairly compete.
The non-compete clauses include acting as an owner, partner, director, officer, employee, or consultant in a competing business. These restrictions do not apply to ownership of less than 5% of a publicly held company. The FDD states that these covenants are considered reasonable in terms of time, geographical area, and scope to protect Crave's business interests.