Does the Crisp & Green agreement allow for direct engagement in a Competitive Business?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
in the preceding paragraph constitute Confidential Information of Franchisor. I will at no time copy, duplicate, record or otherwise reproduce any of the Confidential Information or material containing it, in whole or in part, store them in a computer retrieval or database, nor otherwise make them available to any unauthorized person.
I further agree that, during the term of my employment/service/association or ownership participation, I will not, directly or indirectly, engage or participate in any Competitive Business (defined below in this paragraph), any of which such prohibited behavior I understand and hereby explicitly acknowledge would or could be injurious to, or (in Franchisor's sole judgment) have an adverse effect upon, Franchisor's protectable interests in the Confidential Information, the CRISP & GREEN trademark, or the goodwill and/or reputation of Restaurants generally. I agree that I am prohibited from engaging in any Competitive Business as a proprietor, partner, investor, shareholder, director, officer, employee, principal, agent, advisor, or consultant. For purposes of this Agreement, a "Competitive Business" means any business that: (1) operates as a restaurant or similar food-service provider and derives more than twenty percent (20%) of its revenue from selling salads and grain bowls in a fast-food, quick-service, drive-thru or drive-in format; or (2) grants franchises or licenses to others to operate the type of business specified in the preceding subparagraph (other than a CRISP & GREEN-branded restaurant operated under a franchise agreement with Franchisor). Despite the foregoing definition of a Competitive Business, nothing under this Agreement or the Franchise Agreement will prevent Individual from owning for investment purposes less than five percent (5%) of a Competitive Business whose stock or other forms of ownership interest are publicly traded on a recognized United States stock exchange, and so long as neither Individual nor Franchisee controls the company in question.
Source: Item 23 — RECEIPTS (FDD pages 66–252)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, franchisees are generally prohibited from engaging in any Competitive Business during their association with the franchise. A Competitive Business is defined as any business that operates as a restaurant or food-service provider deriving more than 20% of its revenue from selling salads and grain bowls in a fast-food, quick-service, drive-thru, or drive-in format. It also includes businesses that grant franchises or licenses to others to operate similar businesses, excluding Crisp & Green-branded restaurants operating under a franchise agreement with the company.
This prohibition extends to various forms of involvement, including being a proprietor, partner, investor, shareholder, director, officer, employee, principal, agent, advisor, or consultant. The agreement explicitly states that such involvement could be detrimental to Crisp & Green's interests in confidential information, trademarks, and the goodwill/reputation of its restaurants.
However, there is an exception: an individual can own less than 5% of a publicly traded Competitive Business's stock or other ownership interests for investment purposes, provided that neither the individual nor the franchisee controls the company. Franchisees must also disclose any existing interests in businesses that might be considered competitive in their franchise application, and confirm that entering into the Crisp & Green agreement does not violate any other agreements they may be bound by.