Does the Crisp & Green non-compete agreement prevent participation in a Competitive Business as a director?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
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 restricts involvement in a Competitive Business in various capacities.
The agreement explicitly prohibits engaging in a Competitive Business 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 over 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 for such operations.
However, the agreement includes an 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 in publicly traded companies that might be considered competitors without violating the non-compete terms.