Are Crave franchisees prohibited from using confidential information for their own benefit after the franchise agreement term?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
- 10.2.1 Neither you nor the Principals shall, during the term of this Agreement or thereafter, communicate, divulge or use for the benefit of any other person, persons, partnership, association or corporation and, following the expiration or termination of this Agreement, they shall not use for their own benefit any confidential information, knowledge or know-how concerning the methods of operation of the Franchised Business which may be communicated to them or of which they may be apprised in connection with the operation of the Franchised Business under the terms of this Agreement. You and the Principals shall divulge such confidential information only to such of your employees as must have access to it in order to operate the Franchised Business. Any and all information, knowledge, know-how, techniques and any materials used in or related to the System which we provide to you in connection with this Agreement, including but not limited to the Manual, plans and specifications, marketing information and strategies and site evaluation, selection guidelines and techniques, recipes, and the terms of this Agreement, shall be deemed confidential for purposes of this Agreement. Neither you nor the Principals shall at any time, without our prior written consent, copy, duplicate, record or otherwise reproduce such materials or information, in whole or in part, nor otherwise make the same available to any unauthorized person. The covenants in this Section shall survive the expiration, termination or transfer of this Agreement or any interest herein and shall be perpetually binding upon you and the Principals.
Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD pages 47–48)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, franchisees and their principals are indeed prohibited from using confidential information for their own benefit after the franchise agreement expires or terminates. This restriction is in place to protect Crave's proprietary methods of operation. The confidential information includes, but is not limited to, the operations manual, plans, specifications, marketing strategies, site evaluation techniques, and recipes.
This means that after a franchisee's agreement with Crave ends, they cannot use any of the knowledge or information gained during their time as a franchisee to start a competing business or otherwise benefit personally. The franchisee can only share confidential information with employees who need it to operate the Crave franchise. This obligation extends to the franchisee's principals, general manager, and any personnel with access to confidential information, who may be required to sign similar confidentiality agreements.
The FDD emphasizes that these confidentiality covenants survive the expiration, termination, or transfer of the franchise agreement, making them perpetually binding. This ensures that Crave's trade secrets and operational methods remain protected even after a franchisee exits the system. Franchisees must also prevent unauthorized individuals from accessing or reproducing confidential materials without Crave's written consent.
This is a fairly standard practice in franchising, as franchisors need to protect their intellectual property and business methods. Prospective Crave franchisees should carefully review the confidentiality agreements and understand the scope of the restrictions, both during and after the franchise term, to ensure they can comply with these obligations.