What business practices are Crepe De Licious franchisees prohibited from engaging in?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
ecifications, proprietary practices and procedures, policies, marketing strategies, and information comprising the System and the Manual.
"Manual" means our confidential operations manual for the operation of a Crepe de licious business, which may be periodically modified by us.
"Marks" means the logotypes, service marks, and trademarks now or hereafter involved in the operation of a Crepe de licious business, including "CREPE DE LICIOUS," and any other trademarks, service marks, or trade names that we designate for use by a Crepe de licious business. The term "Marks" also includes any distinctive trade dress used to identify a Crepe de licious business, whether now in existence or hereafter created.
"Prohibited Activities" means any or all of the following: (i) owning, operating, or having any other interest (as an owner, partner, director, officer, employee, manager, consultant, shareholder, creditor, representative, agent, or in any similar capacity) in a Competitive Business (other than owning an interest of five percent (5%) or less in a publicly-traded company that is a Competitive Business); and/or (ii) diverting or attempting to divert any business from us (or one of our affiliates or franchisees).
"Restricted Period" means the two-year period after you cease to be a manager or officer of Franchisee's Crepe de licious business; provided, however, that if a court of competent jurisdiction determines that this period of time is too long to be enforceable, then the "Restricted Period" means the 12 month period after you cease to be a manager or officer of Franchisee's Crepe de licious business.
"Restricted Territory" means the geographic area within: (i) a 25-mile radius from Franchisee's Crepe de licious business (and including the premises of the approved location of Franchisee);
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
According to the 2025 Crepe De Licious Franchise Disclosure Document, franchisees are restricted from certain business activities, particularly those that constitute unfair competition. While a manager or officer of a Crepe De Licious franchise, franchisees agree not to unfairly compete with Crepe De Licious by engaging in any "Prohibited Activities." These activities include owning, operating, or having any interest in a Competitive Business, with a minor exception of owning 5% or less in a publicly-traded company that is a Competitive Business. Additionally, franchisees are prohibited from diverting or attempting to divert any business from Crepe De Licious or its affiliates and franchisees.
After the relationship with Crepe De Licious ends, the franchisee is still restricted from unfair competition during the "Restricted Period," which is two years after ceasing to be a manager or officer. However, if a court deems this period too long, it defaults to a 12-month period. During this time, engaging in Prohibited Activities is not allowed, especially concerning Competitive Businesses within the "Restricted Territory." The Restricted Territory is defined as the geographic area within a 25-mile radius of the franchisee's Crepe De Licious business and other Crepe De Licious businesses operating or under construction. If this territory is considered too broad by a court, it reduces to a 12-mile radius. If a franchisee engages in Prohibited Activities during the Restricted Period, that period is extended by the duration of the prohibited activity.
The agreement also addresses potential circumvention through immediate family members. If an immediate family member (spouse, parent, sibling, child, grandparent, or grandchild) engages in Prohibited Activities or uses/discloses Know-how during the franchisee's restricted period, it is presumed the franchisee violated the agreement. However, the franchisee can rebut this presumption by providing conclusive evidence that they did not disclose the Know-how to the family member. These measures are in place to protect Crepe De Licious's Intellectual Property and System, ensuring fair competition and the continued success of the franchise system.
Furthermore, the franchise agreement specifies that franchisees may not sell or advertise products or services within another franchisee's designated territory. Crepe De Licious retains the right to operate or franchise businesses using its Marks and System outside the franchisee's territory, regardless of proximity or potential impact on the franchisee's business. They can also utilize third-party delivery and ghost kitchen companies within or adjacent to a franchisee's territory without compensating the franchisee for any sales occurring within their territory. Crepe De Licious also reserves the right to use and license other proprietary marks or methods, even those similar to the Marks, in alternative channels of distribution or in the operation of quick-service restaurants, at any location, including within the franchisee's territory.