Can a Crepe De Licious franchisee face competition from outlets owned by the franchisor?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. You may also face competition from third party delivery or ghost kitchens related to or utilized by our franchise system. You may not sell products or services, or advertise products or services, within another franchisee's Territory.
Source: Item 12 — TERRITORY (FDD pages 40–43)
What This Means (2025 FDD)
According to Crepe De Licious's 2025 Franchise Disclosure Document, franchisees may face competition from outlets owned by the franchisor. Specifically, Item 12 states that franchisees do not receive an exclusive territory. This means that Crepe De Licious, its affiliates, or other franchisees could potentially operate a Crepe De Licious Restaurant or Kiosk within the same general area as a franchisee's location. This also applies to Area Development Agreements, where developers may face competition from other outlets that Crepe De Licious owns or controls.
This lack of an exclusive territory has significant implications for prospective franchisees. It means that Crepe De Licious retains considerable freedom to expand its brand presence, even if it means placing new locations in close proximity to existing franchisees. This could potentially dilute a franchisee's customer base and impact their revenue. Franchisees need to be aware that Crepe De Licious also retains the right to use alternative channels of distribution, such as internet sales, grocery stores, and other retail locations, both within and outside of a franchisee's territory.
Crepe De Licious also retains broad rights regarding the use of trademarks and systems outside of a franchisee's territory. They can operate or license others to operate Crepe De Licious Restaurants, Kiosks, and Food Trucks at any location outside the Territory, even if it affects a franchisee's operation. Furthermore, Crepe De Licious can purchase or merge with any business, including those that directly compete with a franchisee's Crepe De Licious Restaurant, Kiosk, or Food Truck, regardless of location.
In summary, a Crepe De Licious franchisee's territory is non-exclusive, and the franchisor retains significant rights to operate or license others to operate competing outlets and alternative distribution channels, even within or near a franchisee's territory. Prospective franchisees should carefully consider these factors and evaluate the potential impact of competition from the franchisor and other sources on their business's profitability and long-term success.