For how long after termination or expiration of the Crepe De Licious Franchise Agreement is the franchisee subject to non-competition restrictions?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
Area Developer covenants that, except as otherwise approved in writing by Franchisor, for a continuous uninterrupted period of two (2) years from the date of (a) a transfer permitted under Section 7 above; (b) expiration of this Agreement; (c) termination of this Agreement (regardless of the cause for termination); (d) a final order of a duly authorized arbitrator, panel of arbitrators, or a court of competent jurisdiction (after all appeals have been taken) with respect to any of the foregoing or with respect to enforcement of this Section 8.3; or (e) any or all of the foregoing, Area Developer shall not either directly or indirectly, for itself, or through, on behalf of, or in conjunction with any person, partnership, corporation, or other entity, own, maintain, operate, engage in, be employed by, or have any interest in any Competitive Restaurant, which is, or is intended to be (i) located within the Development Area (other than those Franchised Restaurant provided for in the Development Schedule), or makes offers and sales into the Development Area; or (ii) located within a radius of twenty-five (25) miles of any other Crepe Delicious Restaurant located anywhere.
Provided, however, that this provision shall not apply to the operation by Area Developer of any business under the System under a franchise agreement with Franchisor.
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
According to the 2025 Crepe De Licious Franchise Disclosure Document, Area Developers are subject to a non-compete covenant for two years after the transfer, expiration, or termination of the Area Development Agreement. This restriction applies regardless of the cause of termination or a final order from an arbitrator or court.
During this two-year period, the Area Developer cannot directly or indirectly own, operate, be employed by, or have any interest in a Competitive Restaurant. A Competitive Restaurant is defined as one that is or is intended to be located within the Development Area or within a 25-mile radius of any other Crepe De Licious restaurant. This restriction includes restaurants that make offers and sales into the Development Area.
This non-compete provision does not prevent an Area Developer from operating a business under the Crepe De Licious system through a separate franchise agreement with the franchisor. There is also an exception for ownership in public entities. This means that the Area Developer can own less than 5% of a publicly traded company that may be considered a competitor.