Can Crave reduce the scope of any covenant in the agreement without my consent?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
-
- I understand and acknowledge that the Company 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 my consent, effective immediately upon receipt by me of written notice thereof; and I agree to comply forthwith with any covenant as so modified.
-
- The Company is a third-party beneficiary of this Agreement and may enforce it, solely and/or jointly with the Franchisee. I am aware that my violation of this Agreement will cause the Company and the Franchisee irreparable harm; therefore, I acknowledge and agree that the Franchisee and/or the Company may apply for the issuance of an injunction preventing me from violating this Agreement, and I agree to pay the Franchisee and the Company all the costs it/they incur(s), including, without limitation, legal fees and expenses, if this Agreement is enforced against me. Due to the importance of this Agreement to the Franchisee and the Company, any claim I have against the Franchisee or the Company is a separate matter and does not entitle me to violate or justify any violation of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, Crave has the right to reduce the scope of any covenant in the agreement without the franchisee's consent. Specifically, Crave can modify the covenant's scope immediately upon providing written notice to the franchisee, and the franchisee must comply with the modified covenant. This applies to the Confidentiality and Non-Compete Agreement as well.
This provision gives Crave significant flexibility in adjusting the restrictions placed on franchisees. For example, Crave could reduce the geographic area covered by a non-compete clause, potentially allowing a former franchisee to operate a competing business closer to an existing Crave location than originally agreed.
While this might seem unfavorable to the franchisee, the FDD also states that if a court finds any portion of a covenant unreasonable, the franchisee agrees to be bound by a lesser covenant that imposes the maximum duty permitted by law. This suggests that the initial covenants are drafted to be as broad as legally possible, and Crave's ability to reduce the scope unilaterally could be a mechanism to ensure enforceability and avoid legal challenges. Prospective franchisees should carefully consider the implications of these clauses and seek legal counsel to fully understand their rights and obligations.