Under what conditions can Crave decrease the period of time or geographic scope of the non-competition covenants?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
- d. If the period of time or the geographic scope specified in Section 2.b. above, should be adjudged unreasonable in any proceeding, then the period of time will be reduced by such number of months or the geographic scope will be reduced by the elimination of such portion thereof, or both, so that such restrictions may be enforced for such time and scope as are adjudged to be reasonable.
In addition, Franchisor shall have the right, in its sole discretion, to reduce the scope of any covenant set forth in this Agreement or any portion thereof, without Covenantor's consent, effective immediately upon receipt by Covenantor of written notice thereof, and Covenantor agrees to forthwith comply with any covenant as so modified.
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, there are two conditions under which the non-competition covenants can be reduced. First, if a court or agency with jurisdiction deems the time or geographic scope of the non-compete agreement unreasonable, the restrictions will be modified to be enforceable for a time and scope that the court considers reasonable. This means that if the original terms are too broad, a court can narrow them so they are legally valid.
Second, Crave has the right to reduce the scope of any non-compete covenant at its sole discretion. This reduction is effective immediately once the franchisee receives written notice. The franchisee must then comply with the modified covenant. This gives Crave flexibility to adjust the non-compete terms as they see fit, without needing the franchisee's consent.
These provisions offer Crave some protection. The brand can enforce a non-compete to the maximum extent allowed by law, and can also proactively adjust the non-compete terms if they determine the original scope is too broad or no longer necessary. For a prospective franchisee, this means the non-compete agreement they sign might be altered by Crave during or after the franchise term.