What parties are considered 'Restricted Parties' under the Crave Cookies Franchise Agreement's non-compete clause?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
ARTICLE 13. COVENANTS
13.1 Confidential Information. With respect to all Confidential Information, Franchisee shall (a) adhere to all procedures prescribed by Crave Cookies Franchising for maintaining confidentiality, (b) disclose such information to its employees only to the extent necessary for the operation of the Business; (c) not use any such information in any other business or in any manner not specifically authorized in writing by Crave Cookies Franchising, (d) exercise the highest degree of diligence and effort to maintain the confidentiality of all such information during and after the term of this Agreement, (e) not copy or otherwise reproduce any Confidential Information, and (f) promptly report any unauthorized disclosure or use of Confidential Information. Franchisee acknowledges that all Confidential Information is owned by Crave Cookies Franchising (except for Confidential Information which Crave Cookies Franchising licenses from another person or entity). This Section will survive the termination or expiration of this Agreement indefinitely.
13.2 Covenants Not to Compete.
- (a) Restriction In Term. During the term of this Agreement, neither Franchisee, any Owner, nor any spouse of an Owner (the "Restricted Parties") 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.
- (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, the non-compete clause in the franchise agreement identifies specific individuals and entities as 'Restricted Parties.' During the term of the agreement, these parties are restricted from engaging in any competitive activities against Crave Cookies.
The 'Restricted Parties' include the franchisee, any owner of the franchise, and any spouse of an owner. This means that all these individuals are subject to the non-compete restrictions outlined in the agreement. They are prohibited from having any ownership interest in, lending money or providing financial assistance to, providing services to, or being employed by any competitor of Crave Cookies during the term of the franchise agreement.
After the franchise agreement expires or is terminated, these restrictions continue for a period of two years. During this post-term period, the 'Restricted Parties' are prohibited from engaging in competitive activities within a five-mile radius of the franchisee's territory or the territory of any other Crave Cookies business operating at the time of termination or transfer. This extended restriction aims to protect Crave Cookies's market and brand integrity even after the franchise relationship ends.