Under what circumstances can Crepe De Licious request covenants from the Area Developer's personnel?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
ious Restaurant sites and sources regarding demographic information, and such site selection counseling and assistance as Franchisor may deem advisable.
- 5.1.2 Such on-site evaluation as Franchisor deems advisable in response to Area Developer's request for site approval for each Franchised Restaurant; provided, however, that Franchisor shall not provide on-site evaluation for any proposed site prior to the receipt of documents as requested by Franchisor for such site prepared by Area Developer pursuant to Section 3.2.
- Designated Manager. If Area Developer is other than an individual, Area Developer shall designate, subject to Franchisor's reasonable approval, one Manager (as defined in Section 9.1) who is an individual person, and who shall be responsible for general oversight and management of the development of the Franchised Restaurant under this Agreement and the operations of all such Franchised Restaurant open and in operation on behalf of Area Developer (the "Designated Manager"). Area Developer acknowledges and agrees that Franchisor shall have the right to rely upon the Designated Manager to have been given, by Area Developer, the responsibility and decision-making authority regarding the Area Developer's business and operation. In the event the person designated as the Designated Manager
becomes incapacitated, leaves the employ of Area Developer, transfers his/her interest in Area Developer, or otherwise ceases to supervise the development of the Franchised Restaurant, Area Developer shall promptly designate a new Designated Manager, subject to Franchisor's reasonable approval.
- 5.3 Records and Reports to Franchisor.
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
According to the 2025 Crepe De Licious FDD, covenants regarding confidential information and competitive businesses can be requested from the Area Developer's personnel under specific circumstances. If the Area Developer is not an individual, Crepe De Licious requires the designation of a 'Designated Manager,' subject to their approval. This Designated Manager is responsible for the general oversight and management of the development and operations of the franchised restaurants on behalf of the Area Developer. Crepe De Licious has the right to rely on this Designated Manager having the necessary responsibility and decision-making authority.
In the event that the Designated Manager becomes incapacitated, leaves the Area Developer's employment, transfers their interest, or otherwise ceases to supervise the development of the Franchised Restaurant, the Area Developer must promptly designate a new Designated Manager, again subject to Crepe De Licious's approval. This ensures that there is always a responsible individual in place who is accountable to Crepe De Licious for the Area Developer's obligations.
Furthermore, the FDD states that in the event that a person in the immediate family of the Area Developer (or, if the Area Developer is not an individual, each Manager that is subject to these covenants) engages in a Competitive Business that would violate Section 8.2.3, the Area Developer will be considered in default under the agreement, leading to potential termination. This highlights the importance of ensuring that not only the Area Developer but also their immediate family and key personnel do not engage in activities that compete with Crepe De Licious during the term of the agreement.