If the non-compete geographic scope is deemed unreasonable, what recourse does Crave have to modify the restriction?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
d. If the period of time or the geographic scope specified in Section 2.b. above, should be adjudged unreasonable in any proceeding, then the period of time will be reduced by such number of months or the geographic scope will be reduced by the elimination of such portion thereof, or both, so that such restrictions may be enforced for such time and scope as are adjudged to be reasonable.
In addition, Franchisor shall have the right, in its sole discretion, to reduce the scope of any covenant set forth in this Agreement or any portion thereof, without Covenantor's consent, effective immediately upon receipt by Covenantor of written notice thereof, and Covenantor agrees to forthwith comply with any covenant as so modified.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, if a court deems the geographic scope of the non-compete agreement unreasonable, the agreement will be modified to be enforceable. Specifically, the geographic scope will be reduced by eliminating a portion of it, so that the restrictions are enforced for a reasonable scope.
In addition to the court's ability to modify the non-compete agreement, Crave has the right to reduce the scope of any covenant in the agreement, or any portion of it. This modification is effective immediately once the franchisee receives written notice. The franchisee must then comply with the modified covenant.
This clause provides Crave with the flexibility to adjust the non-compete agreement to ensure its enforceability. It also protects Crave's interests by allowing them to unilaterally reduce the scope of the non-compete if necessary, rather than risking the entire clause being deemed unenforceable. For a prospective franchisee, this means that the non-compete terms could change during the franchise term, potentially impacting their future business opportunities after leaving the Crave system.