Does the definition of 'Competitive Business' for Crepe De Licious include other Crepe De Licious franchises?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
"Competitive Business" means any business that: (i) sells or offers to sell products the same as or similar to the type of products sold by you in and/or from the Franchisee Territory (including, but not limited to, the products we authorize); or (ii) provides or offers to provide services the same as or similar to the type of services sold by you in and/or from the Franchisee Territory (including, but not limited to, the services we authorize), but excludes a Crepe de licious business operating pursuant to a franchise agreement with us.
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
According to Crepe De Licious's 2025 Franchise Disclosure Document, the definition of 'Competitive Business' specifically excludes other Crepe De Licious franchises. The document defines a 'Competitive Business' as one that sells similar products or services to those offered by a franchisee within their territory, but explicitly states that this definition does not include Crepe De Licious businesses operating under a franchise agreement with them. This means that franchisees are protected from competition from businesses outside the Crepe De Licious system, but not from other Crepe De Licious franchises.
This exclusion has significant implications for prospective franchisees. While the franchise agreement offers some territorial protection, Crepe De Licious retains the right to establish or license other Crepe De Licious businesses, even if they impact an existing franchisee's business. This could lead to market saturation and reduced profitability if multiple Crepe De Licious locations operate in close proximity.
Furthermore, Crepe De Licious reserves the right to utilize third-party delivery and ghost kitchen companies within or adjacent to a franchisee's territory, without compensating the franchisee for any impact on their business. They can also sell proprietary items through various retail channels, even within a franchisee's territory. These rights give Crepe De Licious considerable flexibility in expanding its brand presence, but also pose a risk to individual franchisees who may face increased competition and reduced revenue as a result.
Therefore, a potential franchisee should carefully consider the potential for competition from both within and outside the Crepe De Licious system when evaluating the franchise opportunity. Understanding the specific terms of the franchise agreement regarding territorial protection and the franchisor's rights is crucial for making an informed investment decision.