As a third-party beneficiary, what rights does Crave have regarding the Confidentiality and Non-Competition Agreement?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
Your General Manager and all other personnel who will have access to our proprietary and confidential information and training must sign our Confidentiality and Non-Competition Agreement which is attached to our Franchise Agreement as Attachment 4. We will be a third-party beneficiary of each agreement with the independent right to enforce the agreement's terms. We have the right, in our discretion, to decrease the period of time or geographic scope of the non-competition covenants contained in the attachments or eliminate the non-competition covenants altogether for any party that must sign an agreement as described in this paragraph.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 48–49)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, Crave maintains specific rights as a third-party beneficiary of the Confidentiality and Non-Competition Agreement. This agreement is signed by the franchisee's General Manager and any other personnel with access to Crave's proprietary and confidential information and training. Crave's status as a third-party beneficiary grants it the independent right to enforce the terms of the agreement. This means Crave can directly take legal action to ensure compliance with the agreement's provisions, even though they are not a direct signatory. This is a standard practice in franchising to protect the franchisor's confidential information and brand standards.
Crave also has the discretion to modify the non-competition terms within these agreements. Specifically, Crave can decrease the period of time or geographic scope of the non-competition covenants, or even eliminate them altogether. This flexibility allows Crave to tailor the restrictions based on the specific role or circumstances of the individual signing the agreement. For example, Crave might reduce the non-compete restrictions for a lower-level employee compared to a general manager with extensive knowledge of the business operations.
For a prospective franchisee, this means that Crave is serious about protecting its confidential information and has the legal means to do so. Franchisees should ensure that all relevant personnel understand the terms of the Confidentiality and Non-Competition Agreement and the potential consequences of violating it. Furthermore, franchisees should be aware that Crave can alter the non-competition terms at its discretion, which could impact the franchisee's ability to hire or retain certain employees.