What format of restaurant is considered a 'Competitive Business' to Crisp & Green?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
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, a 'Competitive Business' is defined as any business that operates as a restaurant or similar 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. This definition extends to businesses that grant franchises or licenses to others to operate such restaurants, excluding Crisp & Green-branded restaurants operating under a franchise agreement with Crisp & Green.
This definition has implications for prospective franchisees and their involvement in other businesses. Franchisees are generally prohibited from engaging or participating in any Competitive Business during their term with Crisp & Green, as such activities could harm the franchisor's interests, including confidential information, trademarks, and the goodwill/reputation of Crisp & Green restaurants. This restriction applies to various roles, including proprietor, partner, investor, shareholder, director, officer, employee, principal, agent, advisor, or consultant.
However, there is an exception: individuals can own less than 5% of a Competitive Business for investment purposes, provided the company's stock is publicly traded on a recognized United States stock exchange, and neither the individual nor the franchisee controls the company. This exception allows for minor investment without triggering competitive concerns.
It is important for potential franchisees to fully understand this definition and its implications, as undisclosed involvement in a Competitive Business could be grounds for termination of the franchise agreement. Franchisees should carefully review their existing business interests and activities to ensure compliance with this clause.