Under what circumstances might the non-compete period for an Anago franchise be extended beyond the initial 24 months?

Based on the 2025 Anago Franchise Disclosure Document, the Item 17 section includes additional disclosures for the Franchise Disclosure Document required by various state franchise laws. Specifically, for California franchisees, the document states that the Subfranchise Rights Agreement contains a covenant not to compete that extends beyond termination of the franchise. However, it also notes that this provision may not be enforceable under California law. This suggests that while Anago's standard agreement includes a non-compete clause that could extend beyond the initial term, its enforceability depends on the specific jurisdiction and applicable laws.

For a prospective Anago franchisee in California, this means the enforceability of the non-compete agreement extending beyond the termination of the franchise agreement is uncertain. California law provides rights to franchisees concerning termination, transfer, or non-renewal of a franchise, and if the franchise agreement contains a provision inconsistent with the law, the law will control. This is a critical point for potential franchisees to consider, as the enforceability of such clauses can significantly impact their future business opportunities after leaving the Anago franchise system.

It is important for prospective franchisees to seek legal counsel to understand the specific implications of the non-compete clause in their state. They should also discuss with Anago the circumstances under which they would seek to enforce the non-compete agreement and what factors they consider in determining its enforceability. Understanding these aspects will help franchisees make informed decisions about their investment and future business plans.