Does Crisp & Green have any obligation or liability to the developer if it establishes competing restaurants outside the Development Area?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
D. You acknowledge and agree that other than as set forth in Section C above, we and our Affiliates (and our respective successors and assigns, by purchase, merger, consolidation or otherwise) retain all rights and discretion with respect to the Marks, the System, the sale of products and services similar or dissimilar to those offered by Crisp & Green Restaurants, and the operation or franchising of Crisp & Green Restaurants anywhere located or to be located, and may engage in any business activities whatsoever, within or outside the Development Area, whenever and wherever we desire. Specifically, by way of example and without limitation, we reserve the following rights: (a) to establish and operate, and grant to others the right to operate, Crisp & Green Restaurants physically located outside the Development Area, on such terms and conditions as we deem appropriate (you acknowledge that such Crisp & Green Restaurants may be in direct competition with your Franchised Restaurant(s), without regard to any adverse effects of such activities on your Franchised Restaurant(s) and without any obligation or liability to you), which includes the right of us and others to perform Catering Services or Delivery Services in your Development Area; (b) to establish and operate, and grant to others the right to operate, Crisp & Green Restaurants, or other restaurants using any part or all of the System and/or Marks, that are located at or operated from Non-Traditional Sites within or outside the Development Area; (c) to sell any products or services under the Marks or under any other trademarks, service marks or trade dress, through alternative channels of distribution, wherever located or operating (including, without limitation, the internet or similar electronic media and physical outlets like kiosks, convenience stores or supermarkets); (d) to establish and operate, and grant to others the right to operate, restaurants identified by trademarks, service marks or trade dress, other than the Marks (including the Crisp & Green name and mark), pursuant to such terms and conditions as we deem appropriate and wherever such restaurants are located, which restaurants may be located within the Development Area; (e) to acquire the assets or ownership interests of one or more businesses providing products and services similar or dissimilar to those
Source: Item 23 — RECEIPTS (FDD pages 66–252)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, Crisp & Green retains the right to establish and operate restaurants outside a developer's designated area. The document explicitly states that Crisp & Green has no obligation or liability to the developer, even if these restaurants compete directly with the franchisee's location(s) and negatively impact their business. This includes the right to offer catering and delivery services within the franchisee's development area.
This reservation of rights extends to various business activities, including operating Crisp & Green restaurants or other restaurant concepts using the brand's system and marks from non-traditional sites, selling products through alternative distribution channels like the internet or kiosks, and operating restaurants under different trademarks. Crisp & Green also reserves the right to acquire businesses that offer similar or dissimilar products and services, and to convert these businesses into Crisp & Green restaurants, even within a franchisee's development area.
For a prospective Crisp & Green franchisee, this means that while you may be granted a development area, Crisp & Green can still operate or franchise other locations outside of your area without any obligation to protect your business from competition. This is a common practice in franchising, as franchisors seek to expand their brand presence and explore different market segments. However, it's crucial for franchisees to understand the potential for competition from other outlets and to factor this into their business planning.
It is important to note that the franchise agreement may specify a 'Designated Area' where Crisp & Green will not establish another restaurant during the term of the agreement. However, this protection is limited to the specific Designated Area and does not extend to the broader Development Area. Franchisees should carefully review the terms of their agreement to understand the scope of their protected territory and the potential for competition from other Crisp & Green outlets.