Can Crisp & Green establish and operate Restaurants at Non-Traditional Sites within a franchisee's Designated Area?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
Certain sites, locations, or venues have characteristics that make them distinct from locations that could generally be developed into Restaurants, such as sites that independently generate customer traffic flow separate from the general customer traffic flow of the surrounding area, or that by their nature are not tied to a particular physical location ("Non-Traditional Sites"). Non-Traditional Sites include: military bases; shopping malls (whether open-air or enclosed); large big-box retail outlets; transportation-related venues (e.g., airports, train or bus stations, marinas, travel plazas or toll roads); sports or entertainment venues (e.g., stadiums, arenas, concert halls); major industrial or office complexes, hotels, educational facilities (e.g., school, college, and university campuses); casinos; fitness centers, hospitals and related rehabilitation or healthcare facilities; governmental institutions; amusement or recreational facilities (e.g., theme parks, outdoor municipal parks, zoos, or museums); grocery stores or departments stores; mobilebased channels of distribution (e.g., food trucks); and any co-branding locations or business endeavors where a Restaurant's operations are inextricably associated with, or such operations are contained within or sharing the same physical building or operational premises as, another business (such as, for example and without limitation, a gas/convenience store or another restaurant concept). Non-Traditional Sites are specifically excluded from your Designated Area and Development Area, meaning that we have the right to develop Restaurants or license to others the right to develop Restaurants at Non-Traditional Sites located within the borders of your Designated Area or Development Area.
Because we and others may establish and operate Restaurants at Non-Traditional Sites in your Designated Area or Development Area, and because of the reserved rights above, you will not receive an exclusive territory. You may face competition from other franchisees, from outlets we own, or from other channels of distribution or competitive brands that we control. We do not have to pay you if we solicit or accept orders from inside your Designated Area or Development Area.
Source: Item 12 — TERRITORY (FDD pages 44–47)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, Crisp & Green retains the right to establish and operate restaurants at Non-Traditional Sites, regardless of whether these sites are within a franchisee's Designated Area or Development Area. This means that even if a franchisee has a designated territory, Crisp & Green can still open or authorize others to open Crisp & Green restaurants at Non-Traditional Sites within that territory.
The FDD defines Non-Traditional Sites as locations with characteristics that make them distinct, such as those that independently generate customer traffic or are not tied to a particular physical location. Examples of Non-Traditional Sites include military bases, shopping malls, big-box retail outlets, transportation venues like airports, sports and entertainment venues, industrial or office complexes, hotels, educational facilities, casinos, fitness centers, hospitals, governmental institutions, amusement parks, grocery stores, and even mobile food trucks.
This reservation of rights significantly impacts a franchisee's territorial exclusivity. The FDD explicitly states that franchisees will not receive an exclusive territory due to Crisp & Green's right to develop restaurants at Non-Traditional Sites and other reserved rights. Consequently, franchisees may face competition from other franchisees, company-owned outlets, or other distribution channels controlled by Crisp & Green, even within their Designated Area or Development Area. Franchisees will not be compensated if Crisp & Green solicits or accepts orders from within their Designated Area or Development Area.
Prospective franchisees should carefully consider the implications of this non-exclusive territory. While a Designated Area provides a defined geographic region, the presence of Non-Traditional Sites within that area where Crisp & Green can operate independently introduces a level of competition that could affect the franchisee's potential revenue and market share. It is important for potential franchisees to fully understand the density and nature of Non-Traditional Sites within their proposed Designated Area and to assess the potential impact on their business.