Can Crave deny approval to engage in a competitive business during the term of the agreement?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Own, maintain, operate, engage in, or have any financial or beneficial interest in (including any interest in corporations, partnerships, trusts, unincorporated associations or joint ventures), advise, assist or make loans to, any business located within the United States, its territories, states or commonwealths, or any other country, province, state or geographic area in which we have used, sought registration of or registered the same or similar Marks or operates or licenses others to operate a business under the same or similar Marks, which business is of a character and concept similar to the Franchised Business, including a food service business which offers and sells the same or substantially similar food products (a "Competitive Business") without our prior written consent.
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 engaging in competitive business activities during the term of the agreement without prior written consent from Crave. Specifically, franchisees cannot own, maintain, operate, or have any financial interest in a business that is similar in character and concept to Crave, including a food service business offering substantially similar food products, within the United States or any area where Crave has registered its trademarks, without Crave's approval. This restriction applies during the term of the agreement.
This non-compete clause ensures that franchisees focus solely on the Crave franchise and do not divert resources or knowledge gained from Crave to competing ventures. It protects Crave's market position and proprietary information. The agreement also states that franchisees will receive valuable training and confidential information, including secret recipes and marketing methods, further justifying the need for the non-compete agreement.
After the franchise agreement terminates, a similar non-compete restriction applies for two years. During this period, the franchisee and any principals are prohibited from engaging in a competitive business within a specific geographic area, typically ten miles of the Designated Territory or any Crave outlet location. This post-term restriction is designed to further protect Crave's interests by preventing former franchisees from immediately using their acquired knowledge to compete with the brand.
Crave retains the right to approve or deny a franchisee's involvement in a competitive business, giving them significant control over the franchisee's activities during and for a period after the franchise term. Franchisees should carefully consider these restrictions and their implications for future business opportunities before entering into a franchise agreement with Crave.