What is the maximum beneficial interest I can have in the outstanding securities of any publicly held company without violating the Crave non-compete agreement?

According to Crave's 2025 Franchise Disclosure Document, the non-compete agreements contain exceptions for ownership of small stakes in publicly traded companies. Specifically, both during the term of the agreement and after its expiration or termination, the restrictions on owning or being involved with competitive businesses do not apply if your beneficial interest in the outstanding equity securities of a publicly held company is less than 5%. This means a franchisee can own up to 4.99% of a publicly traded competitor without violating the non-compete terms.

This allowance is fairly standard in franchising to enable franchisees to diversify their investments without necessarily conflicting with their franchise obligations. The key condition is that the company must be registered under the Securities Exchange Act of 1934, meaning it is a publicly held company subject to SEC regulations. This exception exists in both the general non-compete clause and the clause that applies after the franchise agreement ends.

It is important to note that this exception only applies to ownership of securities. Any other form of involvement with a competitor, such as employment, consulting, or making loans, would still be a violation of the non-compete agreement, regardless of the size of your securities ownership. Additionally, Crave retains the right to reduce the scope of any covenant, so this allowance could be modified with written notice.