During the term of the Crave Franchise Agreement, what is prohibited regarding diverting business to competitors?
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.
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, a franchisee is prohibited from diverting or attempting to divert any business or customer of any Crave outlet or other franchisees in the Crave system to any competitor. This includes doing so through direct or indirect inducement or any other means.
Additionally, franchisees are not allowed to participate as an owner, partner, director, officer, employee, consultant, or agent, or serve in any other capacity in any restaurant or food service business that features menu items that are the same or substantially similar to those offered in the Crave system. This restriction is in place to protect the goodwill and unique qualities of the Crave system, as well as to safeguard the confidential information disclosed to the franchisee.
These covenants are acknowledged by both parties as reasonable limitations regarding time, geographical area, and scope of activity. They are designed to protect Crave's goodwill and business interests without imposing unnecessary restrictions on the franchisee. This is a standard practice in franchising to maintain brand consistency and prevent unfair competition within the franchise network.