factual

During the term of the franchise agreement, can a Crisp & Green franchisee have any ownership interest in a Competitive Business?

Crisp_Green Franchise · 2024 FDD

Answer from 2024 FDD Document

in the preceding paragraph constitute Confidential Information of Franchisor. I will at no time copy, duplicate, record or otherwise reproduce any of the Confidential Information or material containing it, in whole or in part, store them in a computer retrieval or database, nor otherwise make them available to any unauthorized person.

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.

Upon the expiration or other termination for any reason of my employment, association, service or ownership participation, I agree: (1) to return immediately to Franchisor or Franchisee, as the case may be, all Confidential Information, and any material(s) containing a subset thereof, in my possession that was utilized, or to which I had access, during my employment, association, service or ownership participation; (2) to refrain, beginning upon such expiration or termination and forever thereafter, from any and all contacts with customers of Restaurants for any purpose whatsoever;

Source: Item 23 — RECEIPTS (FDD pages 66–252)

What This Means (2024 FDD)

According to Crisp & Green's 2024 Franchise Disclosure Document, franchisees are generally prohibited from engaging or participating in any Competitive Business during the term of their franchise agreement. 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 operate such businesses. This prohibition extends to involvement as a proprietor, partner, investor, shareholder, director, officer, employee, principal, agent, advisor, or consultant.

However, there is an exception to this restriction. A Crisp & Green franchisee can own less than 5% of a Competitive Business if its stock or ownership interests are publicly traded on a recognized United States stock exchange, provided that neither the individual nor the franchisee controls the company. This allowance is specifically for investment purposes and allows franchisees to hold minor stakes in publicly traded companies that might be considered competitive.

Before signing the franchise agreement, prospective Crisp & Green franchisees must disclose any existing direct or indirect legal or beneficial interest in any business that may be deemed a Competitive Business. This disclosure is part of the franchise application process, ensuring transparency and preventing conflicts of interest. The franchisor's approval of the franchise application is contingent on the accuracy and completeness of this disclosure. This clause protects Crisp & Green's interests in its confidential information, trademarks, and the goodwill and reputation of its restaurants.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.