Does the post-term covenant apply to Immediate Family members of the Crisp & Green franchisee?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
- (ii) bind any person or entity having any legal or beneficial interest in me, or traceable to, down or through me, including (without limitation) any of member of my Immediate Family, any direct or indirect beneficiary, any partner (general or limited) or proprietor of mine, and any other such related person or entity, regardless of how many levels or tiers there may be between any such described person or entity and me; and
- (iii) identify for me, toward the goal of preserving through this Agreement, Franchisor's protectable legal interests in the System, customers of Restaurants, the Confidential Information, and the goodwill associated with the Marks.
I also expressly acknowledge my possession of skills and abilities of a general nature, and the opportunity for exploiting such skills in other ways than the operation or involvement in the activities of a Restaurant or a Competitive Business, so that enforcement of my covenants made in this Agreement will not deprive me of my personal goodwill or ability to earn a living after the effective date of expiration or termination of my relationship with Franchisee, the Franchised Restaurant, or Restaurants generally. If I fail or refuse to abide by any of my foregoing obligations or promises made under this Agreement, and Franchisor or Franchisee obtains enforcement in a judicial or arbitration proceeding, then my obligations and responsibilities specified under the breached covenant will be tolled during the period(s) of time that the covenant is breached and/or Franchisor or Franchisee seeks to enforce it, and will continue for two (2) years starting from the effective date of the order enforcing the covenant.
Source: Item 23 — RECEIPTS (FDD pages 66–252)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, the post-term covenant applies not only to the franchisee but also to individuals or entities with legal or beneficial interest in the franchisee, including members of their Immediate Family. This extends to any direct or indirect beneficiary, any partner (general or limited), or proprietor of the franchisee, and any other such related person or entity, regardless of how many levels or tiers there may be between any such described person or entity and the franchisee.
This provision means that after the franchise agreement expires or is terminated, the franchisee and their Immediate Family members are restricted from engaging in activities that would compete with Crisp & Green. This restriction covers a broad range of relationships and interests, ensuring that the franchisee cannot bypass the non-compete obligations by involving family members or related entities.
For a prospective Crisp & Green franchisee, this has significant implications. It is crucial to understand that the post-term covenant extends beyond the franchisee themselves and includes their Immediate Family and related business interests. Franchisees should carefully consider these restrictions and how they might impact their family's future business endeavors. The franchisee also acknowledges their existing skills and the opportunity to use them in ways other than operating a Crisp & Green restaurant, so the enforcement of the covenants will not deprive them of their personal goodwill or ability to earn a living after the agreement ends. If the franchisee fails to abide by the obligations under the agreement, the obligations will be tolled during the period of the breach and will continue for two years from the date of the order enforcing the covenant.