Does the Crepe De Licious franchise agreement outline any prohibited actions for the Manager?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
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"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).
"System" means our system for the establishment, development, operation, and management of a Crepe de licious business, including Know-how, proprietary programs and products, Manual, and operating system.
- 2. Background. You are a manager or officer of Franchisee. As a result of this relationship, you may gain knowledge of our System. You understand that protecting the Intellectual Property and our System are vital to our success and that of our franchisees and that you could seriously jeopardize our entire System if you were to unfairly compete with us. In order to avoid such damage, you agree to comply with the terms of this Agreement.
- 3. Know-How and Intellectual Property. You agree: (i) you will not use the Know-how in any business or capacity other than the Crepe de licious business operated by Franchisee; (ii) you will maintain the confidentiality of the Know-how at all times; (iii) you will not make unauthorized copies of documents containing any Know-how; (iv) you will take such reasonable steps as we may ask of you from time to time to prevent unauthorized use or disclosure of the Know-how; and (v) you will stop using the Know-how immediately if you are no longer a manager or officer of Franchisee's Crepe de licious business. You further agree that you will not use all or part of the Intellectual Property or all or part of the System for any purpose other than the performance of your duties for Franchisee and within the scope of your employment or other engagement with Franchisee. These restrictions on Know-how, Intellectual Property and the System shall not apply to any information which is information publicly known or becomes lawfully known in the public domain other than through a breach of this Agreement or is required or compelled by law to be disclosed, provided that you will give reasonable notice to us to allow us to seek protective or other court orders.
- 4. Unfair Competition During Relationship. You agree not to unfairly compete with us at any time while you are a manager or officer of Franchisee's Crepe de licious business by engaging in any Prohibited Activities.
- 5. Unfair Competition After Relationship. You agree not to unfairly compete with us during the Restricted Period by engaging in any Prohibited Activities; provided, however, that the Prohibited Activity relating to having an interest in a Competitive Business will only apply with respect to a Competitive Business that is located within or provides competitive goods or services to customers who are located within the Restricted Territory.
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
According to the 2025 Crepe De Licious Franchise Disclosure Document, the System Protection Agreement outlines prohibited activities for a manager. The agreement states that managers cannot use the Intellectual Property in any business other than for the benefit of the Crepe De Licious Business operated by Franchisee or in any way that is detrimental to Crepe De Licious or to the Franchisee. Managers must maintain the confidentiality of the Intellectual Property at all times and cannot make unauthorized copies of documents containing any Intellectual Property. They must also take reasonable steps to prevent unauthorized use or disclosure of the Intellectual Property and must stop using it immediately if they are no longer an employee, independent contractor, agent, representative, or supplier of Franchisee.
The agreement also addresses unfair competition. While a manager or officer of a Crepe De Licious business, they cannot unfairly compete with Crepe De Licious by engaging in any Prohibited Activities. For a Restricted Period, managers cannot unfairly compete with Crepe De Licious by engaging in any Prohibited Activities; however, the Prohibited Activity relating to having an interest in a Competitive Business will only apply with respect to a Competitive Business that is located within or provides competitive goods or services to customers who are located within the Restricted Territory. If a manager engages in any Prohibited Activities during the Restricted Period, then the Restricted Period will be extended by the period of time during which they were engaging in the Prohibited Activity.
Furthermore, the agreement extends to immediate family members. If any member of the manager's immediate family engages in any Prohibited Activities during any period of time during which the manager is prohibited from engaging in the Prohibited Activities, or uses or discloses the Know-how, it will be presumed that the manager has violated the terms of the agreement. However, the manager may rebut this presumption by furnishing evidence conclusively showing that they did not disclose the Know-how to the family member.
These restrictions are designed to protect Crepe De Licious's interests by preventing managers from using confidential information or engaging in activities that could harm the business, both during and after their association with a franchise location. Prospective franchisees should carefully review these restrictions and consider their implications for themselves and their immediate family members.