Can Crepe De Licious unilaterally reduce the scope of the non-competition covenants in the Owners Agreement?

According to Crepe De Licious's 2025 Franchise Disclosure Document, Crepe De Licious has the right to unilaterally modify the terms of the System Protection Agreement, which contains non-competition covenants. Crepe De Licious can do so by providing written notice to the franchisee. These modifications can include limiting the scope of prohibited activities, narrowing the definition of a competitive business, shortening the duration of the restricted period, reducing the geographic scope of the restricted territory, and/or reducing the scope of any other covenant imposed upon the franchisee.

This clause provides Crepe De Licious with the flexibility to adjust the non-compete terms to ensure they are enforceable under applicable law. This could benefit the franchisee if the original terms are deemed too restrictive by a court. However, it also means that Crepe De Licious can change the terms of the agreement at any time, which could impact the franchisee's future business activities should they leave the Crepe De Licious system.

It is important for a prospective Crepe De Licious franchisee to understand the implications of this unilateral modification clause. While it aims to ensure enforceability, it also introduces an element of uncertainty, as the non-compete terms can change during the agreement. Franchisees should seek legal counsel to fully understand their rights and obligations under the System Protection Agreement and how this clause might affect them.

This type of clause, allowing the franchisor to modify the non-compete agreement, is not uncommon in franchising. It allows the franchisor to respond to changes in the legal or business environment. However, franchisees should carefully consider the potential impact of such clauses on their future business opportunities.