After the Crave Franchise Agreement expires, terminates, or is transferred, what actions are prohibited regarding diverting business to competitors?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
10.3.2 For a continuous uninterrupted period commencing upon the expiration, termination of, or transfer of all of your interest in, this Agreement and continuing for two (2) years thereafter, except as otherwise approved in our sole and absolute discretion, neither you nor any Principal shall, directly or indirectly, for themselves, or through, on behalf of or in conjunction with any person, persons, partnership, or corporation:
(a) Divert, or attempt to divert, any business or customer of the Franchised Business hereunder 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.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, for a period of two years after the expiration, termination, or transfer of a franchise agreement, the franchisee and any principals are restricted from actions that could harm Crave's business. Specifically, they cannot divert or attempt to divert any business or customers from a Crave outlet to a competitor through direct or indirect means. This includes any action that could negatively impact the goodwill associated with Crave's trademarks and system, or interfere with the business of Crave, its franchisees, or affiliated outlets. These restrictions can be lifted if Crave provides written approval at its discretion.
These post-term non-compete covenants are designed to protect Crave's market position and brand reputation. The restrictions prevent a former franchisee from leveraging the knowledge and experience gained while operating a Crave franchise to unfairly compete against the system. The two-year period and the limitations on diverting customers are intended to give Crave sufficient time to stabilize the market after a franchise ends and to protect existing franchisees from potential competition from a former operator.
It is important for prospective Crave franchisees to understand the scope and duration of these post-termination restrictions. While the franchisor can waive these restrictions, it is not guaranteed. Franchisees should consider how these limitations might affect their future business plans if they decide to leave the Crave system. The restrictions are in place to protect the franchisor's and other franchisees' interests, but they also place limitations on the franchisee's ability to operate a similar business after the franchise agreement ends.