What is the effect of Article 23.4 of the All County Franchise Agreement regarding covenants not to compete?

According to All County's 2025 Franchise Disclosure Document, for franchises sold in California, Article 23.4 of the Franchise Agreement contains a covenant not to compete that extends beyond the term of the franchise. The FDD states that this provision may not be enforceable under California law.

In practical terms, this means that while the All County Franchise Agreement includes a clause that restricts a franchisee's ability to compete with All County even after the franchise agreement ends, California law might not uphold this restriction. This is particularly important for prospective franchisees in California to understand, as the enforceability of such covenants can significantly impact their future business opportunities.

Prospective franchisees should seek legal counsel to fully understand the implications of non-compete clauses in their specific state. They should inquire about the specific scope and duration of the non-compete agreement and how it might affect their ability to operate a similar business in the future, especially after the franchise term expires. This due diligence is crucial to making an informed decision about investing in an All County franchise.