What is the dependency for Crave to not establish or authorize another Crave outlet in the Designated Territory?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
Except as provided in this Agreement, and subject to your and Principals' material compliance with this Agreement, any other agreement among you or any of your affiliates (defined for the purposes hereof as any entity that is controlled by, controlling or under common control with such other entity) and us, we shall not establish or authorize any other person or entity, other than you, to establish a Crave outlet in the Designated Territory during the term of this Agreement and any extensions hereof, so long as you are not in default under this Agreement or this Agreement has not been terminated. You acknowledge and understand that the rights granted hereunder pertain only to the establishment of a dedicated Crave outlet.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, Crave's commitment to not establish or authorize another Crave outlet within a franchisee's designated territory is contingent upon the franchisee and their principals maintaining material compliance with the franchise agreement and any other agreements between them and Crave. Additionally, Crave's obligation is voided if the franchisee is in default under the agreement or if the agreement has been terminated. This protection applies only to dedicated Crave outlets.
This means that as long as the franchisee remains in good standing and adheres to the terms of the franchise agreement, Crave will not authorize another competing franchise within the designated territory. This provides a level of territorial exclusivity, which is a common feature in franchising to protect franchisees' investments and market share. However, it's crucial for franchisees to understand what constitutes 'material compliance' and 'default' under the agreement, as any breach could lead to the loss of this territorial protection.
It is also important to note that this territorial protection only extends to dedicated Crave outlets. Crave retains the right to operate or franchise other types of restaurant or distribution models, which could potentially compete with the franchisee's business. Franchisees should carefully consider the implications of this limited exclusivity and assess the potential for competition from other channels or brands operated by Crave.