Under what condition will Crave not establish or franchise another outlet in the Development Area?
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.
- 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 Crave's 2025 Franchise Disclosure Document, specifically section 4.2, Crave and its affiliates will not develop, operate, or grant franchises for Crave businesses within the Development Area if the franchisee is in full compliance with all the terms and conditions of the Multi-Unit Development Agreement. This includes meeting development obligations outlined in Section 3.2, adhering to the Minimum Performance Schedule, and fulfilling all obligations under the franchise agreements executed as part of the Development Agreement. This protection extends for the term of the agreement, ensuring that as long as the franchisee remains compliant, Crave will not authorize competing franchises within their designated area.
However, this exclusivity is subject to certain exceptions. Crave retains the right to grant franchises to the franchisee themselves under the Development Agreement and as otherwise expressly provided in the agreement. Upon termination or expiration of the Development Agreement, Crave and its affiliates regain the right to develop, operate, and grant franchises to others within the Development Area, subject to any territorial rights the franchisee holds for businesses they operate under existing Franchise Agreements and any right of first refusal as described in Section 6.
Additionally, Crave retains rights not expressly granted to the franchisee, including the right to sell products through alternative distribution channels such as the internet, grocery stores, and direct marketing, both within and outside the Development Area. Crave can also operate and franchise dedicated Crave outlets at Non-Traditional Sites (subject to right of first refusal) and operate dedicated Crave outlets outside the Development Area, regardless of proximity to the franchisee's locations. They can also acquire and operate existing restaurant or food service businesses in the Development Area, as long as these businesses do not use Crave's Proprietary Marks.
In practical terms, this means a Crave multi-unit developer can expect a degree of territorial protection as long as they meet their development schedule and remain in compliance with their agreements. However, the franchisee should be aware of the exceptions that allow Crave to operate or franchise through other channels and at non-traditional sites, even within the Development Area. The franchisee should carefully review Sections 3.2, 6, and the definition of "Non-Traditional Sites" to fully understand the scope and limitations of their territorial protection.