How is the 'Designated Area' for a Crisp & Green franchise defined in the Franchise Agreement?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
You are permitted to operate the Franchised Restaurant only at an approved site. If the Franchised Restaurant's lease expires or is terminated without your fault, or if the Franchised Restaurant is destroyed, condemned, or otherwise rendered unusable, we may allow you to relocate the Franchised Restaurant to a new site acceptable to us at your sole expense.
Once the site for your Franchised Restaurant has been approved by us and added to the Franchise Agreement as the premises, we will define your "Designated Area" in Exhibit B to the Franchise Agreement. Your Designated Area will generally consist of a one- to three-mile radius around the site of your Franchised Restaurant (although this may be less in densely populated areas) and will be illustrated on a map. The size and shape of your Designated Area will be based on our current criteria for size, demographics, and topological features.
As long as you are in compliance with the Franchise Agreement and all other agreements between you and your affiliates, on the one hand, and us or one or more of our affiliates, on the other hand, we will not operate (directly or through an affiliate), or grant a third party the right to operate, a Restaurant within your Designated Area (other than at Non-Traditional Sites, as defined below) during the term of the Franchise Agreement. Other than as described in the immediately preceding sentence, your rights under the Franchise Agreement and Area Development Agreement are non-exclusive, meaning that our and our affiliates' activities are unrestricted. By way of example and without limitation, we and our affiliates are permitted, and we specifically reserve the right, to:
Source: Item 12 — TERRITORY (FDD pages 44–47)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, the 'Designated Area' for a franchise is defined after the franchise site has been approved and added to the Franchise Agreement as the premises. Exhibit B of the Franchise Agreement will outline the Designated Area, which typically consists of a one- to three-mile radius around the restaurant's location, although this may be smaller in densely populated areas. A map will illustrate the specific boundaries of the Designated Area. The size and shape are determined by Crisp & Green's criteria for size, demographics, and topological features.
While Crisp & Green will not operate or grant another franchise within the Designated Area (excluding Non-Traditional Sites) as long as the franchisee is in compliance with all agreements, the rights are non-exclusive. This means Crisp & Green and its affiliates retain unrestricted rights. For example, Crisp & Green can establish restaurants at Non-Traditional Sites within the Designated Area, such as those found in shopping malls, airports, or college campuses. They can also sell delivery and catering services into the Designated Area.
It's important to note that franchisees are permitted to accept orders from consumers outside their Designated Area and must provide catering and delivery services according to Crisp & Green's standards. However, franchisees are restricted from engaging in marketing activities within another Restaurant's Designated Area without being part of a Local Marketing Cooperative. Additionally, franchisees need written approval from Crisp & Green to use other distribution channels like the internet or newspapers for sales outside their Designated Area.
Prospective Crisp & Green franchisees should understand that the Designated Area does not constitute an exclusive territory, and they may face competition from other franchisees, company-owned outlets, or alternative distribution channels controlled by Crisp & Green. The FDD clearly states that franchisees will not receive compensation if Crisp & Green solicits or accepts orders from within their Designated Area. Franchisees should carefully consider these factors and evaluate the potential for competition within their Designated Area before investing in a Crisp & Green franchise.