What is the distance restriction from the Crave Franchisee's Designated Territory?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
ugh, 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.
- d. If the period of time or the geographic scope specified in Section 2.b. above, should be adjudged unreasonable in any proceeding, then the period of time will be reduced by such number of months or the geographic scope will be reduced by the elimination of such portion thereof, or both, so that such restrictions may be enforced for such time and scope as are adjudged to be reasonable. In addition, Franchisor shall have the right, in its sole discretion, to reduce the scope of any covenant set forth in this Agreement or any portion thereof, without Covenantor's consent, effective immediately upon receipt by Covenantor of written notice thereof, and Covenantor agrees to forthwith comply with any covenant as so modified.
3. General.
a. Covenantor agrees that in the event of a breach of this Agreement, Franchisor would be irreparably injured and be without an adequate remedy at law. Therefore, in the event of such a
breach, or threatened or attempted breach of any of the provisions hereof, Franchisor, in addition to any other remedies that are made available to it at law or in equity, to a temporary and/or permanent injunction and a decree for the specific performance of the terms of this Agreement, without the necessity of showing actual or threatened harm and without being required to furnish a bond or other security.
- b. Covenantor agrees to pay all expenses (including court costs and reasonable attorneys' fees) incurred by Franchisor in enforcing this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, a franchisee is restricted from involvement with a competitive food service business within a certain distance of their designated territory and existing Crave locations. Specifically, for two years following the termination of the Franchise Agreement, the franchisee cannot participate as an owner, partner, director, officer, employee, or consultant in any restaurant or food service business featuring menu items similar to those in the Crave system. This restriction applies within ten miles of the Designated Territory or any Crave outlet location.
This non-compete clause is designed to protect Crave's goodwill and confidential information. The agreement states that the restrictions are reasonable in terms of time, geographical area, and scope of activity, ensuring they do not impose a greater restraint than necessary to protect Crave's business interests. This means that after leaving the Crave system, a former franchisee is limited in their ability to operate or work for a competing business within that 10-mile radius.
The restrictions do not prevent a former franchisee from holding a less than 5% beneficial interest in the securities of a publicly held company. This exception allows for minor investments in larger companies without violating the non-compete agreement. The franchisee also agrees not to perform any action that would be harmful to the goodwill associated with the Crave system.
Prospective franchisees should carefully consider these non-compete terms, as they will significantly impact their career options in the food service industry for two years after leaving the Crave franchise system. It is important to fully understand the geographical limitations and the types of businesses considered competitive to ensure compliance and avoid potential legal issues.