After the Crave Cookies Franchise Agreement terminates, what is the geographic radius around a Crave Cookies business within which Restricted Parties are prohibited from having an interest in a competitor?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Restriction Post Term. For two years after this Agreement expires or is terminated for any reason (or, if applicable, for two years after a Transfer), no Restricted Party shall 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 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 this Agreement is terminated before the Territory is determined, then 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.
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies's 2025 Franchise Disclosure Document, following the termination or expiration of the Franchise Agreement, certain restrictions apply to the franchisee and related parties. Specifically, for a period of two years after the agreement ends, Restricted Parties are prohibited from having any involvement with a competitor within a five-mile radius of the franchisee's territory or any other Crave Cookies location that was operating at the time of termination or transfer.
This non-compete clause is designed to protect Crave Cookies's market presence and brand integrity by preventing former franchisees from leveraging their knowledge and experience to directly compete with existing locations. The term 'Restricted Parties' includes the franchisee, any owner, and any spouse of an owner, ensuring a broad scope of coverage for the non-compete agreement. This measure aims to prevent any potential circumvention of the non-compete obligations through family members or business partners.
However, if the territory has not been determined before the agreement is terminated, the non-compete area will default to the Development Area and the territory of any other Crave Cookies business operating at the time of termination. This condition is particularly relevant for franchisees in the early stages of development or those who have not yet finalized their location. Prospective franchisees should carefully consider the implications of this clause, especially if they anticipate a potential early termination of the agreement, as it could significantly impact their future business opportunities within the specified area.