Following termination or transfer of a Crave Cookies franchise, what is the geographic restriction on the Guarantor's involvement with a Competitor?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Restriction Post Term.
For two years after the Franchise Agreement expires or is terminated for any reason (or, if applicable, for two years after a Transfer by Guarantor), Guarantor shall not directly or indirectly have any ownership interest in, lend money or provide financial assistance to, provide any services to, or be employed by, any Competitor located within five miles of Franchisee's Territory or the territory of any other Crave Cookies business operating on the date of termination or transfer, as applicable.
If the Franchise Agreement is terminated before the Territory is determined, then the area of non-competition will the Development Area and the territory of any other Crave Cookies business operating on the date of termination.
- (c) Interpretation.
Guarantor agrees that each of the foregoing covenants is independent of any other covenant or provision of this Guaranty or the Franchise Agreement.
If all or any portion of the covenants in this Section is held to be unenforceable or unreasonable by any court or arbitrator, then the parties intend that the court or arbitrator modify such restriction to the extent reasonably necessary to protect the legitimate business interests of Crave Cookies Franchising.
Guarantor agrees that the existence of any claim it or Franchisee may have against Crave Cookies Franchising shall not constitute a defense to the enforcement by Crave Cookies Franchising of the covenants of this Section.
If Guarantor fails to comply with the obligations under this Section during the restrictive period, then the restrictive period will be extended an additional day for each day of noncompliance.
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies's 2025 Franchise Disclosure Document, a Guarantor faces geographic restrictions regarding involvement with a competitor for a period of two years after the franchise agreement expires or is terminated. Specifically, the Guarantor cannot directly or indirectly have any ownership interest in, lend money or provide financial assistance to, provide any services to, or be employed by, any Competitor. This restriction applies within five miles of the franchisee's territory or the territory of any other Crave Cookies business operating on the date of termination or transfer.
If the Franchise Agreement is terminated before the territory is determined, the area of non-competition will be the Development Area and the territory of any other Crave Cookies business operating on the date of termination. This post-term covenant not to compete is designed to protect Crave Cookies's market share and confidential information by preventing former franchisees and their guarantors from leveraging their knowledge and resources to benefit a competing business within a defined geographic area.
It's important to note that if the Guarantor fails to comply with these obligations during the restrictive period, the restrictive period will be extended by an additional day for each day of noncompliance. This clause ensures that Crave Cookies can enforce the non-compete agreement effectively. Prospective franchisees should carefully consider these restrictions and how they might impact future business opportunities before entering into a franchise agreement with Crave Cookies.