What must a Crisp & Green franchisee do to maintain the territorial protection of their Designated Area?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
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:
- Establish and operate, or authorize others to establish and operate, Restaurants physically located at Non-Traditional Sites, whether or not within your Designated Area or Development Area, on any terms and conditions we deem appropriate;
- Establish and operate, or authorize others to establish and operate, Restaurants physically located outside of your Designated Area and Development Area on any terms and conditions we deem appropriate;
- Sell delivery and catering services, and authorize others to sell delivery and catering services, into your Designated Area and Development Area, on any terms and conditions we deem appropriate;
- Use other channels of distribution, such as the internet, grocery stores, convenience stores, kiosks, telemarketing, newspapers, or other direct marketing sales channels, to sell products and services to customers located in any place (inside or outside your Designated Area or
Source: Item 12 — TERRITORY (FDD pages 44–47)
What This Means (2024 FDD)
According to the 2024 Crisp & Green Franchise Disclosure Document, maintaining territorial rights within a Designated Area is contingent upon compliance with the Franchise Agreement and all other agreements between the franchisee and Crisp & Green or its affiliates. As long as the franchisee remains in compliance, Crisp & Green will not operate or grant a third party the right to operate a Restaurant within the franchisee's Designated Area, with the exception of Non-Traditional Sites.
However, the FDD also specifies that the rights granted under the Franchise Agreement are non-exclusive, meaning that Crisp & Green's activities and those of its affiliates are largely unrestricted. For example, Crisp & Green retains the right to establish Restaurants at Non-Traditional Sites within a franchisee's Designated Area. They can also sell delivery and catering services into the Designated Area, and use other channels of distribution to sell products and services to customers located in any place.
Furthermore, Crisp & Green reserves the right to own and operate businesses offering similar products, even within a franchisee's Designated Area, and can be acquired by a business providing similar products and services. These stipulations mean that while a Designated Area is defined, it does not guarantee an exclusive territory free from competition from the franchisor itself or other channels under its control.
Notably, the FDD states that the continuation of territorial rights does not depend on achieving a certain sales volume, market penetration, or other contingency, and that Crisp & Green may not alter the Designated Area or territorial rights without the franchisee's consent unless the Franchise Agreement is terminated. This provides some assurance that the territory will not be changed arbitrarily, but the numerous exceptions and reserved rights mean that the value of the territorial protection is limited.