After termination or expiration of the Crave agreement, what are franchisees prohibited from doing regarding their representation as a multi-unit developer?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
- 4.3 Upon the termination or expiration of this Agreement, we and our affiliates shall have the right to develop and operate, and to grant to others development rights and franchises to develop and operate, dedicated Crave outlets within the Development Area subject only to the territorial rights granted to you with respect to Franchised Businesses operated by you pursuant to the Franchise Agreements and subject, further, to the right of first refusal described in Section 6 below.
- 4.4 We and our affiliates retain all rights not expressly granted to you with respect to Crave outlets, the Marks and the sale of any goods and services, anywhere in the world, including, without limitation, the right:
- 4.4.1 to produce, offer and sell and to grant others the right to produce, offer and sell the products offered at dedicated Crave outlets and any other goods displaying the Marks or other trade and service marks through alternative distribution channels, as described below, both within and outside the Development Area, and under any terms and conditions we deem appropriate. "Alternative distribution channels" include, but are not limited to, the internet, catalog sales, grocery stores, club stores, specialty food stores, telemarketing or other direct marketing sales;
- 4.4.2 to operate and to grant others the right to operate dedicated Crave outlets located outside the Development Area under any terms and conditions we deem appropriate and regardless of proximity to a Franchised Business;
- 4.4.3 to operate and to grant others the right to operate dedicated Crave outlets at Non-Traditional Sites within and outside the Development Area under any terms and conditions we deem appropriate, subject to the right of first refusal described in Section 6.2; and
- 4.4.4 to acquire and operate a business operating one or more restaurants or food service businesses located or operating in the Development Area, except that these businesses will not operate using the Proprietary Marks.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to the 2025 Crave FDD, upon the termination or expiration of the Multi-Unit Development Agreement, Crave and its affiliates have the right to develop and operate, and to grant to others development rights and franchises to develop and operate, dedicated Crave outlets within the Development Area. This is subject to the territorial rights granted to the franchisee with respect to Franchised Businesses operated by them pursuant to the Franchise Agreements and subject, further, to the right of first refusal described in Section 6 of the agreement.
Crave and its affiliates retain all rights not expressly granted to the franchisee with respect to Crave outlets, the Marks and the sale of any goods and services, anywhere in the world. This includes the right to produce, offer and sell and to grant others the right to produce, offer and sell the products offered at dedicated Crave outlets and any other goods displaying the Marks or other trade and service marks through alternative distribution channels, both within and outside the Development Area, and under any terms and conditions Crave deems appropriate. Alternative distribution channels include, but are not limited to, the internet, catalog sales, grocery stores, club stores, specialty food stores, telemarketing or other direct marketing sales.
Crave also retains the right to operate and to grant others the right to operate dedicated Crave outlets located outside the Development Area under any terms and conditions they deem appropriate and regardless of proximity to a Franchised Business. They can also operate and grant others the right to operate dedicated Crave outlets at Non-Traditional Sites within and outside the Development Area under any terms and conditions they deem appropriate, subject to the right of first refusal described in Section 6.2. Additionally, Crave can acquire and operate a business operating one or more restaurants or food service businesses located or operating in the Development Area, except that these businesses will not operate using the Proprietary Marks.
In practical terms, this means that once the Multi-Unit Development Agreement ends, Crave is free to expand within the franchisee's former development area, subject to any existing territorial rights from operating franchises and a right of first refusal. The franchisee loses the exclusive right to develop new Crave franchises in that area and Crave can pursue any distribution channels or operate other restaurant concepts as long as they do not use Crave's trademarks for those other concepts.