Under what condition will Crave not establish or franchise another dedicated Crave outlet in the Development Area during the term of the Development Agreement?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
- 4.2 Provided you are in full compliance with all the terms and conditions of this Agreement, including without limitation your development obligations described in Section 3.2 and the Minimum Performance Schedule, and you are in full compliance with all of your obligations under all franchise agreements executed pursuant to this Agreement, then during the term of this Agreement neither we nor any of our affiliates will develop or operate or grant franchises for the development or operation of Franchised Businesses within the Development Area, except the franchises that are granted to you pursuant to this Agreement and except as otherwise expressly provided in this Agreement.
- 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.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, Crave will not establish or franchise another dedicated Crave outlet in the Development Area during the term of the Development Agreement if the franchisee is not in default under the agreement. Specifically, the franchisee must be in compliance with all terms and conditions, including development obligations and the Minimum Performance Schedule, as well as all obligations under any franchise agreements executed under the Development Agreement.
This condition protects the multi-unit developer by preventing Crave from oversaturating their designated territory with competing corporate-owned or franchised locations, as long as the developer is meeting their contractual obligations. The "Development Area" is defined in Attachment 2 of the Multi-Unit Development Agreement.
However, this exclusivity is not absolute. Crave retains the right to operate or franchise other types of restaurants or distribution models (other than dedicated Crave restaurants) within the Development Area. They can also operate dedicated Crave outlets at Non-Traditional Sites within the Development Area, subject to a right of first refusal for the franchisee. Furthermore, Crave can acquire and operate existing restaurant businesses in the Development Area, as long as they do not use Crave's proprietary marks.
Prospective franchisees should carefully review the Development Agreement and attachments to fully understand the scope of their exclusive development rights and the specific conditions that must be met to maintain that exclusivity. They should also inquire about Crave's plans for alternative distribution channels and non-traditional sites within their Development Area to assess potential competition.