Does Crisp & Green require franchisees to disclose any direct or indirect interest in a Competitive Business?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
- 1.03 Your Representations. You and your Principal Owners, if applicable, represent and warrant to us that: (a) neither you nor any of your Principal Owners has made any untrue statement of any material fact or has omitted to state any material fact in obtaining the rights granted hereunder; (b) neither you nor any of your Principal Owners has any direct or indirect legal or beneficial interest in any business that may be deemed a Competitive Business, except as otherwise completely and accurately disclosed in your franchise application submitted to us; and (c) the execution and performance of this Agreement will not violate any other agreement to which you or of any of your Principal Owners may be bound. You recognize that we have approved your franchise application
Source: Item 23 — RECEIPTS (FDD pages 66–252)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, franchisees and their principal owners must disclose any direct or indirect legal or beneficial interest in any business that may be deemed a Competitive Business. This disclosure must be complete and accurate within the franchise application submitted to Crisp & Green. Furthermore, franchisees and their principal owners represent and warrant that they do not have any undisclosed interest in a Competitive Business.
A "Competitive Business" is defined as any business that (1) 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 (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). However, the agreement does not prevent individuals from owning less than 5% of a Competitive Business for investment purposes, provided the stock is publicly traded on a recognized United States stock exchange and neither the individual nor the franchisee controls the company.
This requirement ensures that prospective Crisp & Green franchisees are not simultaneously involved in businesses that directly compete with the Crisp & Green brand. It protects Crisp & Green's market position and prevents potential conflicts of interest. Franchisees should carefully review the definition of "Competitive Business" and fully disclose any relevant interests in their franchise application to avoid potential breaches of the franchise agreement. Failure to disclose such interests could have legal and financial repercussions.