Does the Crepe De Licious arbitration provision apply after the termination of the Franchise Agreement?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
Based on the 2025 Crepe De Licious Franchise Disclosure Document, the arbitration provision extends beyond the termination of the Area Development Agreement. Specifically, the agreement states that the non-compete obligations apply for two years from the date of termination of the agreement, regardless of the cause for termination, or from a final order of a duly authorized arbitrator.
This means that even after the Area Development Agreement is terminated, an Area Developer is still bound by the non-compete clause for two years. This includes restrictions on owning, operating, or being involved with a Competitive Restaurant within the Development Area or within 25 miles of any other Crepe Delicious Restaurant. The start date for this two-year period can be triggered by the termination date itself or by a final arbitration order related to the termination or enforcement of the non-compete clause.
For a prospective Crepe De Licious Area Developer, this has significant implications. It means that even if the relationship with Crepe De Licious ends, the Area Developer cannot immediately engage in a similar business. This restriction is in place to protect Crepe De Licious's market and brand. The Area Developer needs to be aware of these post-termination obligations and factor them into their business decisions and future plans.