After the Crave franchise is terminated or expires, what is the geographic limit of the non-competition covenant for the franchisee and its principals?

According to Crave's 2025 Franchise Disclosure Document, both the franchisee and their principals are subject to a non-competition covenant for a period of two years following the expiration or termination of the franchise agreement. This covenant restricts them from operating or having any interest in a similar business within a 10-mile radius of any Crave franchise location within the system.

This post-term non-compete agreement means that a former Crave franchisee is restricted from opening a competing business or being involved with a similar business within that 10-mile radius. This restriction applies regardless of whether the termination was initiated by the franchisee or Crave. The term "principals" typically refers to individuals with significant ownership or management roles within the franchisee's business entity, extending the non-compete obligation beyond just the franchisee themselves.

The geographic scope of 10 miles is a fairly standard restriction in the franchise industry. The purpose of this covenant is to protect Crave's market share and prevent former franchisees from using the brand's confidential information or business model to compete against the franchise system.

Prospective franchisees should carefully consider the implications of this non-compete clause, especially if they plan to remain in the same geographic area after the franchise term ends. It is advisable to seek legal counsel to fully understand the scope and enforceability of the non-compete agreement in their specific jurisdiction.