Can Crave unilaterally reduce the scope of the non-compete covenant, and if so, what is the required notification to the Covenantor?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
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 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, Crave has the right to unilaterally reduce the scope of any covenant within the agreement, including the non-compete agreement, without the Covenantor's consent. This modification becomes effective immediately once the Covenantor receives written notice of the change. The Covenantor is then obligated to comply with the revised covenant.
This clause provides Crave with considerable flexibility to adjust the non-compete terms as they see fit. This could potentially benefit a franchisee if Crave reduces the restrictions, allowing for more business opportunities after the franchise agreement ends. However, it also carries the risk that Crave could modify the non-compete in a way that is still restrictive but perhaps less predictable.
For a prospective franchisee, it's important to understand the implications of this unilateral modification right. While the initial non-compete terms might seem reasonable, Crave retains the power to alter them. Franchisees should seek legal counsel to fully grasp the potential impact and to assess the enforceability of such a clause in their specific jurisdiction. Understanding the typical reasons for such modifications and discussing them with existing franchisees could also provide valuable insights.