What is the condition for a Crave franchisee to engage in activities outside of the Franchised 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, a franchisee's ability to engage in activities outside of the franchised business is restricted both during and after the term of the Franchise Agreement. During the agreement, franchisees are prohibited from diverting business from any Crave outlet to a competitor or participating in any food service business that offers similar menu items to Crave.
Specifically, during the term of the Franchise Agreement, the franchisee (referred to as Covenantor) cannot divert business from Crave or other franchisees to any competitor. They also cannot participate as an owner, partner, director, officer, employee, consultant, or agent in any restaurant or food service business featuring menu items that are substantially similar to those offered in the Crave system.
Post-termination, for a period of two years, the franchisee is restricted from diverting business from Crave outlets and from participating in a similar food service business within ten miles of the Designated Territory or any Crave outlet location. These covenants are in place to protect the goodwill and unique qualities of the Crave system, and the franchisor considers these limitations reasonable in terms of time, geographical area, and scope of activity.