During the term of the Crave Franchise Agreement, can I, without written approval from Crave, divert business from the Franchised Business to a competitor?
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 Crave's 2025 Franchise Disclosure Document, during the term of the Franchise Agreement, you are prohibited from diverting or attempting to divert any business or customer of any Crave outlet to a competitor. This restriction applies whether the inducement is direct or indirect.
Specifically, you cannot participate as an owner, partner, director, officer, employee, consultant, or agent 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 ensure that confidential information disclosed to you is not used to benefit a competing business.
The agreement emphasizes that these covenants are considered reasonable limitations regarding time, geographical area, and scope of activity. They are designed to protect Crave's business interests without imposing unnecessary restraints on the franchisee. Therefore, during the term of the franchise agreement, you must obtain written approval from Crave to engage in any activity that could divert business to a competitor.