During the term of the Crave Franchise Agreement, what geographic areas are covered by the non-compete clause regarding owning a Competitive Business?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
a. In order to protect the goodwill and unique qualities of the System, and in consideration for the disclosure to Covenantor of the Confidential Information, Covenantor further agrees and covenants that during the term of the Franchise Agreement, Covenantor shall not, for Covenantor or through, on behalf of or in conjunction with any person or entity:
(i) divert, or attempt to divert, any business or customer of any Crave outlet or of other franchisees in the System to any competitor, by direct or indirect inducement or otherwise, or
(ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in any restaurant or food service business featuring menu items which are the same or substantially similar to those offered in the Crave System.
b. In further consideration for the disclosure to Covenantor of the Confidential Information and to protect the goodwill and unique qualities of the System, Covenantor further agrees and covenants that, upon the termination of the Franchise Agreement and continuing for two (2) years thereafter, Covenantor shall not, for Covenantor or through, on behalf of or in conjunction with any person or entity:
(i) divert, or attempt to divert, any business or customer of any Crave outlet or of other franchisees in the Crave System to any competitor, by direct or indirect inducement or otherwise, or
(ii) participate as an owner, partner, director, officer, employee, or consultant or serve in any other managerial, operational or supervisory capacity in any restaurant or food service business featuring menu items which are the same or substantially similar to those offered in the Crave System within ten (10) miles of the Designated Territory or any Crave outlet location.
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.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to the 2025 Crave FDD, during the term of the Franchise Agreement, a franchisee (or "Covenantor") is restricted from participating in any restaurant or food service business featuring menu items that are the same or substantially similar to those offered in the Crave system. This restriction applies to the franchisee acting as an owner, partner, director, officer, employee, consultant, or agent.
Upon termination of the Franchise Agreement, the non-compete extends for two years. During this period, the franchisee is prohibited from engaging in a similar restaurant or food service business within ten miles of the Designated Territory or any Crave outlet location. This includes acting as an owner, partner, director, officer, employee, or consultant in such a business.
The FDD specifies that these non-compete covenants are considered reasonable in terms of time, geographical area, and scope of activity. The purpose is to protect the goodwill and business interests of Crave. However, an addendum for the state of Indiana notes that any post-term non-compete covenant must not extend beyond the franchisee's exclusive territory, which may modify the standard agreement.