Does the Crave franchise agreement assign any monetary value to goodwill associated with a franchisee's use of the Crave Marks upon expiration or termination of the agreement?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
f this Agreement, except as otherwise approved in writing by us, which approval may be withheld or denied in our sole and absolute discretion, neither you nor any of Principal shall, either directly or indirectly, for themselves or through, on behalf of or in conjunction with any person(s), partnership or corporation:
- (a) Divert, or attempt to divert, any business or customer of the Franchised Business to any competitor, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System or in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize the business of the Franchisor or any Crave franchisees or Franchisor-affiliated outlets.
- (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 prod
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
Based on the 2025 FDD, the Crave franchise agreement does not explicitly assign a monetary value to the goodwill associated with a franchisee's use of the Crave Marks upon the agreement's expiration or termination. However, the agreement does emphasize the protection of the goodwill associated with the Crave brand. Franchisees are prohibited from taking actions that could harm or diminish this goodwill, both during the term of the agreement and for a period of two years after termination. This suggests that while no direct monetary value is assigned, the goodwill is considered a valuable asset of the Crave franchise system.
The Crave franchise agreement includes clauses that prevent franchisees from engaging in activities that could negatively impact the goodwill of the brand. Specifically, franchisees are restricted from diverting business or customers to competitors and from operating or having an interest in a competing business within certain geographic areas. These restrictions are in place to protect the Crave brand's reputation and market position. The agreement also states that upon termination, the franchisee must transfer any interest in electronic advertising and telephone listings related to the Crave brand back to the franchisor.
While the Crave FDD does not specify a monetary value for goodwill, the non-compete and confidentiality clauses suggest that Crave considers its brand reputation and customer relationships to be valuable assets. Prospective franchisees should consider the implications of these restrictions and the potential impact on their ability to operate a similar business after the franchise agreement expires or is terminated. It is common in franchising to protect brand goodwill through such measures, but the specific terms can vary significantly between franchise systems. Therefore, a prospective franchisee should seek clarification from Crave regarding the valuation and protection of goodwill, and how these factors might affect their investment and future business opportunities.