Does the Crisp & Green non-compete agreement prevent participation in a Competitive Business as a consultant?
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 the 2024 Crisp & Green Franchise Disclosure Document, the non-compete agreement explicitly prohibits participation in a Competitive Business as a consultant. This restriction is part of a broader set of limitations aimed at protecting Crisp & Green's interests.
The agreement states that during the term of employment, service, association, or ownership participation, individuals are prohibited from engaging in any Competitive Business, whether directly or indirectly. This includes acting as a proprietor, partner, investor, shareholder, director, officer, employee, principal, agent, advisor, or consultant. A Competitive Business is defined as any business that operates as a restaurant or 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, or any business that grants franchises or licenses to others to operate such a business.
This non-compete clause is designed to prevent franchisees and related parties from using Crisp & Green's confidential information, trademarks, and goodwill to benefit a competing business. The restriction extends to various roles, including consultancy, ensuring that individuals cannot advise or assist a Competitive Business while associated with Crisp & Green.
There is a limited exception: owning less than 5% of a publicly traded Competitive Business for investment purposes is permitted, provided that neither the individual nor the franchisee controls the company. This exception allows for minor investment without active involvement or control over the Competitive Business. Prospective franchisees should carefully consider these restrictions and how they might affect their future business activities.