Following termination of the Crave Franchise Agreement, what is the geographic radius around the Designated Territory or any Crave outlet location within which the Covenantor is restricted from participating in a similar food service business?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
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, following the termination of the Franchise Agreement, a Covenantor is restricted from involvement in a similar food service business within a specific geographic radius. For a period of two years after the termination of the Franchise Agreement, the Covenantor cannot participate as an owner, partner, director, officer, employee, or consultant in any restaurant or food service business featuring menu items similar to those offered 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 franchisor considers these restrictions 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.
For a prospective franchisee, this means that after leaving the Crave system, they will be unable to operate or be involved with a competing food service business within the specified radius for two years. This could limit their immediate career options and require them to seek opportunities outside of the restricted area or in a different type of business. It is important to carefully consider these limitations before entering into a franchise agreement with Crave.