What constitutes unfair competition by a former Crepe De Licious franchisee after termination?
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); and (ii) a 25 mile radius from all other Crepe de licious businesses that are operating or under construction as of the beginning of the Restricted Period; provided, however, that if a court of competent jurisdiction determines that the foregoing Restricted Territory is too broad to be enforceable, then the "Restricted Territory" means the geographic area within a 12-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, unfair competition by a former franchisee is defined within the System Protection Agreement. This agreement outlines specific restrictions on activities that a manager or officer of a Crepe De Licious franchise must adhere to, both during their relationship with the franchise and for a specified period afterward. These restrictions are designed to protect Crepe De Licious's intellectual property, system, and market position.
Specifically, unfair competition after the relationship with Crepe De Licious is defined as engaging in "Prohibited Activities" during the "Restricted Period." Prohibited Activities include owning, operating, or having any interest in a Competitive Business, or diverting or attempting to divert business from Crepe De Licious. A Competitive Business is one that sells similar products or services to those offered by Crepe De Licious within the Franchisee Territory. The Restricted Period is generally two years after ceasing to be a manager or officer, but it may be reduced to 12 months if a court deems the two-year period unenforceable.
The Restricted Territory, where these competitive restrictions apply, is within a 25-mile radius of the former franchisee's Crepe De Licious business and other Crepe De Licious locations, potentially reduced to 12 miles by a court. Furthermore, if a former manager or officer engages in Prohibited Activities during the Restricted Period, that period is extended by the duration of the prohibited activity. Immediate family members engaging in Prohibited Activities or using the Know-how are presumed to be a violation by the former manager or officer, unless they can prove no disclosure occurred.
For a prospective franchisee, this means understanding that leaving the Crepe De Licious system comes with significant limitations on engaging in similar businesses. These restrictions are in place to protect the brand and other franchisees, but they could limit a former franchisee's future business opportunities. It is important to carefully review the System Protection Agreement and understand the scope of these restrictions before investing in a Crepe De Licious franchise.