Does the Crepe De Licious agreement confer rights to third parties?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
r services, or advertise products or services, within another franchisee's Territory. Other than the limited rights expressly granted to you under this Agreement, we (on behalf of ourselves and our affiliates) reserve all rights to use the Marks and System, including the following rights, in any manner and on any terms and conditions we deem advisable, and without granting you any rights, accommodation or compensation:
- (a) to own, franchise, establish and/or operate, and license others to establish and operate, businesses using the Marks and System outside the Territory regardless of the proximity to your Crepe de licious Business (even if there may be some impact to your Crepe de licious Business);
- (b) to contract and utilize third party delivery and ghost kitchen companies that may operate within or adjacent to your Territory regardless of the proximity to your Crepe de licious Business (even if there may be some impact to your Crepe de licious Business; you will have no right to be compensated from these third party sales which may occur within your Territory;
- (c) to use and license the use of other proprietary and non-proprietary marks or methods, which are not the same as or confusingly similar to the Marks, whether in alternative channels of distribution or in the operation of a business offering quick-service restaurants and related products and services, at any location, including within the Territory, which may be similar to or different from the Crepe de licious Business operated by you;
- (d) to sell or distribute, at retail or wholesale or otherwise, directly or indirectly, or license others to sell or distribute, any proprietary items (such as crepe ingredients, crepes, crepe-based food items and crepe sandwiches, and gelato) which bear any proprietary marks, including the Marks, through grocery stores, convenience stores, hotel shops and kiosks, theaters, malls, airports, gas stations, college campuses, sports venues, third party delivery companies, ghost kitchens, or other retail locations within or outside the Territory;
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
According to the 2025 Crepe De Licious Franchise Disclosure Document, the franchise agreement does address third-party rights, particularly concerning the franchisor's rights and the franchisee's obligations regarding intellectual property and business operations. Crepe De Licious retains significant rights to use the Marks and System, including the right to operate and license others outside the franchisee's territory, even if it impacts the franchisee's business. They can also contract with third-party delivery and ghost kitchen companies within or adjacent to the franchisee's territory without compensating the franchisee for any sales occurring within their territory.
Furthermore, Crepe De Licious has the right to sell or distribute proprietary items through various retail channels, including grocery stores and third-party delivery services, within or outside the franchisee's territory. This indicates that while franchisees have a license to operate under the Crepe De Licious system, the franchisor maintains broad control over the brand and its distribution channels, which could introduce competition within the franchisee's market.
The agreement also includes a System Protection Agreement that employees, independent contractors, agents, representatives, or suppliers of a franchisee must sign. This agreement ensures that these individuals protect Crepe De Licious's intellectual property and do not use it in any way that could harm the franchise system. This highlights the importance Crepe De Licious places on protecting its brand and proprietary information, extending obligations to parties beyond just the franchisee.
In summary, while the franchise agreement primarily governs the relationship between Crepe De Licious and its franchisees, it also addresses the rights and obligations of third parties, particularly concerning the franchisor's ability to operate and license others, and the protection of intellectual property by those associated with the franchisee. Prospective franchisees should carefully consider these provisions to understand the potential for competition within their territory and the obligations imposed on their staff and suppliers.