After the Crave Franchise Agreement expires, terminates, or is transferred, can I own a Competitive Business with Crave's approval?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
(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 products (a "Competitive Business") without our prior written consent.
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:
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 the Franchise Agreement, a franchisee or any principal is restricted from owning, operating, or having a financial interest in a Competitive Business without Crave's prior written consent. A Competitive Business is defined as a food service business that offers and sells the same or substantially similar food products as Crave. This restriction applies within the United States, its territories, states, or commonwealths, or any other country, province, state, or geographic area where Crave has used, sought registration of, or registered similar Marks or operates or licenses others to operate a business under the same or similar Marks.
This non-compete clause prevents former Crave franchisees from directly competing with the Crave system shortly after their franchise agreement ends. The clause aims to protect Crave's market share, brand recognition, and goodwill by preventing former franchisees from using their knowledge of the Crave system to operate a competing business.
However, Crave may approve a franchisee to own a Competitive Business at their sole and absolute discretion. A prospective franchisee should inquire about the specific conditions under which Crave might grant such approval and what factors they consider when making this decision. Understanding these conditions can help a franchisee plan for their future business endeavors after their franchise term with Crave concludes.