If the non-compete period after termination of the Crave Franchise Agreement is deemed unreasonable, how will it be adjusted?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding anything to the contrary contained in this Article, if any valid, applicable law or regulation of a competent governmental authority having jurisdiction over this franchise and the parties hereto shall limit our rights of termination under this Agreement or shall require longer notice periods than
those set forth above, this Agreement is deemed amended to satisfy the minimum notice periods or restrictions upon such termination required by such laws and regulations; provided, however, that such constructive amendment shall not be deemed a concession by us that the grounds for termination set forth in this Agreement do not constitute "good cause" for termination within the meaning ascribed to that term by any applicable law or regulation. We shall not be precluded from contesting the validity, enforceability or application of such laws or regulations in any action, hearing or proceeding relating to this Agreement or the termination of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
Based on the 2025 Crave Franchise Disclosure Document excerpts, there is no information provided regarding the specific adjustments that would be made to the non-compete period if it is deemed unreasonable. The excerpts do discuss termination and post-termination obligations, but they do not address the modification of non-compete terms based on legal challenges or findings of unreasonableness.
While the FDD excerpts do not provide details on how the non-compete period would be adjusted, they do mention that the agreement is deemed to be amended to satisfy the minimum notice periods or restrictions upon termination required by applicable laws. However, this constructive amendment does not concede that the grounds for termination set forth in the agreement do not constitute "good cause" for termination within the meaning ascribed to that term by any applicable law or regulation.
A prospective Crave franchisee should seek clarification from the franchisor regarding the specific process or formula used to adjust the non-compete clause if it is found to be unreasonable under applicable state laws. It would be prudent to understand the factors that would be considered, such as geographic scope, duration, and the nature of prohibited activities, and how these might be modified to ensure enforceability.