During the term of the Crave Cookies agreement, can a spouse of an owner have an ownership interest in a competing business?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
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, during the term of the franchise agreement, a spouse of an owner is restricted from having an ownership interest in a competing business. Specifically, the franchise agreement states that neither the franchisee, any owner, nor any spouse of an owner can 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 during the entire term of the agreement.
This provision is a standard non-compete clause designed to protect Crave Cookies's market position and confidential information. By including the spouse of an owner, Crave Cookies aims to prevent any potential conflicts of interest or competitive advantages that could arise through family connections. This means that if a person becomes a Crave Cookies franchisee or owner, their spouse must also refrain from involvement with any competing business during the term of the franchise agreement.
After the franchise agreement expires or is terminated, these restrictions continue for two years. During this post-term period, neither the franchisee, any owner, nor any spouse of an owner can have an ownership interest, lend money, provide services, or be employed by a competitor 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. This extended restriction further safeguards Crave Cookies's interests by preventing former franchisees and their families from immediately leveraging their knowledge and resources to compete against the franchise in close proximity.