What is the geographic scope of the non-compete covenants for Afuri Ramen Dumpling during the term of the franchise association?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
- 6.2 Geographic Scope. During the term of your association with Franchisee, the covenants described in Section 6.1 above shall apply worldwide. During the two-year period after your association with Franchisee, such covenants will apply within the Development Territory, within a 50-mile radius of the Development Territory, and within a 50-mile radius of any location or designated territory where we operate or have granted the franchise to operate an Afuri business.
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, during the term of the franchise agreement, the non-compete covenants described in Section 6.1 apply worldwide. This means that while you are an Afuri Ramen Dumpling franchisee, you are restricted from participating in or being involved with any business that offers ramen, other Japanese-style cuisine, Vietnamese pho, or any business offering similar products or services to Afuri Ramen Dumpling anywhere in the world.
This restriction is quite broad, preventing franchisees from engaging in competitive businesses globally during their franchise term. This could significantly limit a franchisee's business activities beyond their specific Afuri Ramen Dumpling location. It is important to note that this applies not only to direct ownership but also to indirect participation as an owner, director, officer, employee, consultant, licensor, licensee, distributor, or agent.
It is essential for potential franchisees to fully understand the implications of this worldwide non-compete clause. They should consider whether they have any existing or potential future business interests that could be affected by this restriction. Franchisees should also seek legal counsel to fully understand the scope and enforceability of this clause in their specific circumstances. This is a stricter non-compete than many franchises, which often limit the scope to a specific radius around the franchise location or territory.