In the Crepe De Licious agreement, what is the Area Developer agreeing to regarding promises or covenants?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
er(s) personally guarantee, in a written guaranty satisfactory to Franchisor, the performance of the obligations of the Area Developer under this Agreement; (c) Area Developer executes a Transfer of Franchise form as prescribed and approved by Franchisor; (d) such transferee entity is newly organized and its business purpose is confined exclusively to developing and operating the Franchised Restaurant; and (e) Area Developer and any other Manager(s) execute any and all other ancillary agreements as Franchisor may require.
8. COVENANTS
- 8.1 Confidential Information. Area Developer shall at all times preserve in confidence any and all materials and information furnished or disclosed to Area Developer by Franchisor, and shall disclose such information or materials only to such of Area Developer's employees or agents who must have access to it in connection with their employment. Area Developer shall not at any time, during the term of this Agreement or thereafter, without Franchisor's prior written consent, copy, duplicate, record, or otherwise reproduce such materials or information, in whole or in part, nor otherwise make the same available to any unauthorized person.
- 8.2 During the Term. Area Developer specifically acknowledges that, pursuant to this Agreement, Area Developer will receive valuable specialized training and confidential information, which may include, without limitation, information regarding the operational, sales, advertising and promotional methods and techniques of Franchisor and the System. Area Developer covenants that during the term of this Agreement, except as otherwise approved in writing by Franchisor, Area Developer shall not, either directly or indirectly, for itself, or through, on behalf of, or in conjunction with any person, persons, partnership, or corporation:
- 8.2.1 Divert or attempt to divert any business or customer of any Crepe Delicious Restaurant or of any unit under the System to any competitor, by direct or indirect inducement or
otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks or the System.
- 8.2.2 Unless released in writing by the employer, employ or seek to employ any person who is at that time employed by Franchisor or by any other franchisee or area developer of Franchisor, or otherwise directly or indirectly induce such person to leave his or her employment.
- 8.2.3 Own, maintain, operate, engage in, be employed by, provide any assistance to, or have any more than a one percent (1%) interest in (as owner or otherwise) any Competitive Business. A "Competitive Business" shall be considered a retail food business with sales or offers any crepe-based food items or gelato. Furthermore, Area Developer acknowledges and agrees that Area Developer shall be considered in default under this Agreement and that this Agreement will be subject to immediate termination as provided in Section 6.2 herein, in the event that a person in the immediate family (including spouse, domestic partner, parent or child) of Area Developer (or, if Area Developer is other than an individual, each Manager that is subject to these covenants) engages in a Competitive Business that would violate this Section 8.2.3 if such person was subject to the covenants of this Section 8.2.3.
- 8.3 After the Agreement and After a Transfer. Area Developer covenants that, except as otherwise approved in writing by Franchisor, for a continuous uninterrupted period of two (2) years from the date of (a) a transfer permitted under Section 7 above; (b) expiration of this Agreement; (c) termination of this Agreement (regardless of the cause for termination); (d) a final order of a duly authorized arbitrator, panel of arbitrators, or a court of competent jurisdiction (after all appeals have been taken) with respect to any of the foregoing or with respect to enforcement of this Section 8.3; or (e) any or all of the foregoing, Area Developer shall not either directly or indirectly, for itself, or through, on behalf of, or in conjunction with any person, partnership, corporation, or other entity, own, maintain, operate, engage in, be employed by, or have any interest in any Competitive Restaurant, which is, or is intended to be (i) located within the Development Area (other than those Franchised Restaurant provided for in the Development Schedule), or makes offers and sales into the Development Area; or (ii) located within a radius of twenty-five (25) miles of any other Crepe Delicious Restaurant located anywhere. Provided, however, that this provision shall not apply to the operation by Area Developer of any business under the System under a franchise agreement with Franchisor.
- 8.4 Exception for Ownership in Public Entities. Sections 8.2 and 8.3 hereof shall not apply to ownership by Area Developer of less than a five percent (5%) beneficial interest in the outstanding equity securities of any publicly held corporation. As used in this Agreement, the term "publicly held corporation" refers to a corporation which has outstanding securities that have been registered under the federal Securities Exchange Act of 1934.
- 8.5 Personal Covenants.
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
According to the 2025 Crepe De Licious FDD, the Area Developer agrees to several covenants regarding confidential information, conduct during the term of the agreement, and activities after the agreement's termination or transfer. During the term, the Area Developer must keep Crepe De Licious's confidential information secure and only share it with employees or agents who need it for their work. They cannot copy or reproduce this information without Crepe De Licious's permission. The Area Developer also agrees not to divert business from any Crepe De Licious restaurant, employ Crepe De Licious's or another franchisee's employees, or have more than a 1% interest in a Competitive Business, defined as a retail food business selling crepe-based food items or gelato.
After the agreement ends (due to transfer, expiration, termination, or a court order), the Area Developer is restricted for two years from owning, operating, or being involved with any Competitive Restaurant within the Development Area or within 25 miles of any other Crepe De Licious restaurant. This restriction does not apply if the Area Developer is operating a Crepe De Licious business under a franchise agreement with Crepe De Licious.
Crepe De Licious also has the right to modify these terms. Crepe De Licious may modify the agreement by limiting the scope of prohibited activities, narrowing the definition of a Competitive Business, shortening the restricted period, reducing the geographic scope, and/or reducing the scope of any other covenant. The Area Developer also agrees to be bound by any promise or covenant imposing the maximum duty permitted by law. The Area Developer also agrees that the existence of any claims it may have against Crepe De Licious, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by Crepe De Licious of the covenants.