Is a Crave franchisee allowed to contest the validity of Crave's interest in the Crave Marks, or assist others in doing so?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
d. Covenantor shall not at any time, directly or indirectly, do any act or omit to do any act that would or would likely be injurious or prejudicial to the goodwill associated with the System.
2. Covenants Not to Compete.
a. In order to protect the goodwill and unique qualities of the System, and in consideration for the disclosure to Covenantor of the Confidential Information, Covenantor further agrees and covenants that during the term of the Franchise Agreement, 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 System to any competitor, by direct or indirect inducement or otherwise, or
(ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other 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.
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.
c. The parties acknowledge and agree that each of the covenants contained herein are reasonable limitations as to time, geographical area, and scope of activity to be restrained and do not impose a greater restraint than is necessary to protect the goodwill or other business interests of Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
Based on the 2025 Crave Franchise Disclosure Document, the franchisee is restricted from actions that could harm the goodwill associated with Crave's trademarks. Specifically, during the term of the franchise agreement, the franchisee cannot perform any act that is injurious or prejudicial to the goodwill associated with the Marks and the System. This includes actions that could interfere with, disturb, disrupt, decrease, or otherwise jeopardize the business of the Franchisor or any Crave franchisees.
After the termination of the Franchise Agreement, for a period of two years, the franchisee is restricted from diverting or attempting to divert any business or customer of any Crave outlet to any competitor. They are also prohibited from participating in any restaurant or food service business featuring menu items that are the same or substantially similar to those offered in the Crave System within ten miles of the Designated Territory or any Crave outlet location.
While the FDD excerpts do not explicitly state that a franchisee is prohibited from contesting the validity of Crave's interest in the Crave Marks, the broad restrictions against actions that could harm the goodwill associated with the marks could be interpreted to include such activities. A prospective franchisee should seek clarification from the franchisor regarding the specific scope of these restrictions and whether they extend to challenging the validity of the Crave Marks.