What geographic areas are covered by the non-compete agreement after leaving a Crave franchise?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, after the termination of the Franchise Agreement, the franchisee, or Covenantor, is restricted from engaging in competitive activities for two years. This restriction applies within ten miles of the Designated Territory or any Crave outlet location. The non-compete prevents the franchisee from diverting business or customers from any Crave outlet or other franchisees within the Crave system.
Specifically, the franchisee cannot participate as an owner, partner, director, officer, employee, or consultant in any restaurant or food service business that features menu items that are the same or substantially similar to those offered in the Crave system. This post-term covenant aims to protect the goodwill and unique qualities of the Crave system by preventing former franchisees from directly competing using similar concepts or menus in close proximity to existing Crave locations.
The FDD states that Crave considers these covenants reasonable in terms of time, geographical area, and scope of activity, ensuring they do not impose a greater restraint than necessary to protect the goodwill or other business interests of the franchisor. This suggests that Crave has attempted to balance its need to protect its brand with the franchisee's ability to pursue other business ventures after leaving the system. Prospective franchisees should carefully consider the implications of this non-compete, especially if they plan to remain in the same geographic area and industry after their franchise agreement ends.