What is a Crisp & Green franchisee prohibited from doing with respect to a Competitive Business within a specified radius of the Premises after termination?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
Upon the expiration or other termination for any reason of my employment, association, service or ownership participation, I agree: (1) to return immediately to Franchisor or Franchisee, as the case may be, all Confidential Information, and any material(s) containing a subset thereof, in my possession that was utilized, or to which I had access, during my employment, association, service or ownership participation; (2) to refrain, beginning upon such expiration or termination and forever thereafter, from any and all contacts with customers of Restaurants for any purpose whatsoever; and (3) for a period of two (2) years, starting on the effective date of termination or expiration of my employment/service/association or ownership participation, to refrain from directly or indirectly (such as through any one or more of my spouse, domestic partner, parents, children or sibling(s) (collectively, "Immediate Family")) owning a legal or beneficial interest in, or rendering services or giving advice to: (a) any Competitive Business operating at the Premises or within a fifteen (15)-mile radius of the Premises; (b) any Competitive Business operating within a radius of fifteen (15) miles of any Restaurant in operation or under construction on the effective date of termination or expiration of my employment/service/association/ownership participation; or (c) any entity which grants franchises, licenses or other interests to others to operate any Competitive Business. In the event the Premises is located in a metropolitan area having a population of more than 100,000 persons within a ten (10)-mile radius of the Premises, the foregoing fifteen (15)-mile radius restriction will be limited to a radius of ten (10) miles from any Restaurant (including the one formerly operated under this Agreement). I acknowledge and understand that the provisions of this Agreement, including my representations, covenants, and warranties (as applicable) given hereunder, are necessary and integral to this Agreement and to Franchisor's and Franchisee's interests under the Franchise Agreement, and are intended to:
(i) preclude not only direct competition, but also all forms of indirect competition, such as consultation for Competitive Businesses, service as an independent contractor for Competitive
Source: Item 23 — RECEIPTS (FDD pages 66–252)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, for a period of two years after the termination or expiration of their franchise, franchisees are restricted from certain activities related to competitive businesses. Specifically, they cannot directly or indirectly own a legal or beneficial interest in, or provide services or advice to, a Competitive Business operating at the Premises or within a 15-mile radius of the Premises. If the Premises is located in a metropolitan area with a population exceeding 100,000 within a 10-mile radius, this restriction is reduced to a 10-mile radius from any Crisp & Green Restaurant.
This restriction also applies to any Competitive Business operating within a 15-mile radius of any Crisp & Green Restaurant in operation or under construction at the time of termination or expiration. Furthermore, franchisees are prohibited from engaging with any entity that grants franchises, licenses, or other interests to others to operate any Competitive Business.
The term "Competitive Business" is defined as any business that operates as a restaurant or similar food-service provider and derives more than 20% of its revenue from selling salads and grain bowls in a fast-food, quick-service, drive-thru, or drive-in format, or any business that grants franchises or licenses to others to operate such a business. However, a franchisee can own less than 5% of a Competitive Business if its stock is publicly traded on a recognized United States stock exchange, provided that neither the franchisee nor an individual controls the company.
These non-compete provisions are designed to protect Crisp & Green's confidential information, trademark, goodwill, and reputation. The agreement aims to prevent direct competition and indirect competition, such as consulting for Competitive Businesses or providing any assistance or information that could materially aid a competitor. Immediate family members are also included in these restrictions, preventing them from engaging in the prohibited activities on behalf of the former franchisee.