During the term of the Crave Franchise Agreement, can I own a Competitive Business without written consent?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Own, maintain, operate, engage in, or have any financial or beneficial interest in (including any interest in corporations, partnerships, trusts, unincorporated associations or joint ventures), advise, assist or make loans to, any business located within the United States, its territories, states or commonwealths, or any other country, province, state or geographic area in which we have used, sought registration of or registered the same or similar Marks or operates or licenses others to operate a business under the same or similar Marks, which business is of a character and concept similar to the Franchised Business, including a food service business which offers and sells the same or substantially similar food products (a "Competitive Business") without our prior written consent.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, during the term of the Franchise Agreement, franchisees are restricted from owning or being involved with a Competitive Business without prior written consent from Crave. A Competitive Business is defined as one with a similar character and concept to the franchised Crave business, including food service businesses offering substantially similar food products. This restriction applies to businesses located within the United States, its territories, states, or commonwealths, as well as any other country, province, state, or geographic area where Crave has used, sought registration of, or registered similar Marks, or operates or licenses others to operate a business under the same or similar Marks.
This provision prevents franchisees from directly competing with their Crave franchise or other Crave franchisees. It ensures that franchisees focus their efforts on growing their Crave business and do not divert resources or customers to competing ventures. Obtaining written consent from Crave is essential if a franchisee wishes to engage in any business activity that could be considered competitive.
The restriction extends to having any financial or beneficial interest in a Competitive Business, including interests in corporations, partnerships, trusts, unincorporated associations, or joint ventures. It also includes advising, assisting, or making loans to such businesses. This broad definition aims to prevent franchisees from supporting or benefiting from competing businesses in any capacity.
This type of restriction is common in franchising to protect the brand and the franchise system. Prospective Crave franchisees should carefully consider this restriction and ensure they are willing to comply with it before entering into the Franchise Agreement. If a franchisee violates this clause, it could lead to a breach of contract and potential termination of the franchise agreement.