Is the post-term non-compete restriction for Crave Cookies triggered by a transfer of the franchise?
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
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies' 2025 Franchise Disclosure Document, the post-term non-compete restriction is triggered by a transfer of the franchise. Specifically, the FDD states that the non-compete applies for two years after the franchise agreement expires or is terminated for any reason, or, if applicable, for two years after a transfer.
This means that if a Crave Cookies franchisee transfers their franchise to a new owner, the original franchisee is subject to the non-compete for two years following the transfer date. This restriction prevents the former franchisee from engaging in any competitive business within a five-mile radius of their former Crave Cookies territory or any other Crave Cookies location operating at the time of the transfer.
The non-compete aims to protect Crave Cookies' market share and brand reputation by preventing former franchisees from using their knowledge and experience gained from the franchise to compete against the system. The restriction's duration and geographic scope are designed to be reasonable, balancing the franchisor's need for protection with the franchisee's ability to pursue other business opportunities.