What actions are considered 'injurious or prejudicial to the goodwill' of the Crepe De Licious system?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
You understand that protecting the Intellectual Property and our System are vital to our success and that of our franchisees and that you could seriously jeopardize our entire System if you were to unfairly compete with us.
In order to avoid such damage, you agree to comply with the terms of this Agreement.
You agree: (i) you will not use the Know-how in any business or capacity other than the Crepe de licious business operated by Franchisee; (ii) you will maintain the confidentiality of the Know-how at all times; (iii) you will not make unauthorized copies of documents containing any Know-how; (iv) you will take such reasonable steps as we may ask of you from time to time to prevent unauthorized use or disclosure of the Know-how; and (v) you will stop using the Know-how immediately if you are no longer a manager or officer of Franchisee's Crepe de licious business.
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
According to the 2025 Crepe De Licious Franchise Disclosure Document, actions considered 'injurious or prejudicial to the goodwill' of the system relate to the misuse and unauthorized disclosure of the brand's intellectual property and system know-how. Specifically, the System Protection Agreement outlines that as a manager or officer of a Crepe De Licious franchise, an individual may gain knowledge of the franchisor's Intellectual Property, which includes trademarks, copyrights, know-how, and the operating system. The franchisor emphasizes that protecting this intellectual property is crucial for the success of both the franchisor and its franchisees.
The agreement explicitly states that using the Intellectual Property in any way that doesn't benefit the Crepe De Licious business operated by the franchisee, or any action detrimental to the franchisor or franchisee, is prohibited. This includes maintaining the confidentiality of the Intellectual Property, avoiding unauthorized copies of documents containing such information, and taking reasonable steps to prevent unauthorized use or disclosure. Furthermore, the agreement mandates that the use of Intellectual Property must cease immediately upon termination of employment or engagement with the franchisee.
In practical terms, this means a Crepe De Licious franchisee or their employees must not use the brand's recipes, operational methods, marketing strategies, or any other proprietary information for any purpose other than operating their franchised business. They cannot share this information with competitors, start a competing business using similar methods, or otherwise exploit the brand's intellectual property for personal gain. Failure to comply with these restrictions could result in legal action from Crepe De Licious, as well as potential damage to the brand's reputation and the success of other franchisees.
This type of clause is standard in franchise agreements to protect the franchisor's brand and system. Prospective franchisees should carefully review the System Protection Agreement and understand their obligations regarding the use and protection of Crepe De Licious's intellectual property. They should also ensure that their employees are aware of these restrictions and take appropriate measures to safeguard confidential information.