What actions are Restricted Persons prohibited from doing that are considered injurious or prejudicial to the goodwill associated with the Angry Chickz Marks during the term of the franchise agreement?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
- 12.1 Non-Competition. Franchisee acknowledges that the System is distinctive and has been developed by Company and/or its Affiliates at great effort, time, and expense, and that Franchisee has regular and continuing access to valuable and confidential information, training, and Confidential Information regarding the System. Franchisee recognizes its obligations to keep confidential such information as set forth in this Agreement. Franchisee therefore agrees as follows:
- 12.1.1 During the Term, no Restricted Person shall in any capacity, either directly or indirectly, through one or more affiliated Entities, (i) engage in any Competitive Activities, (ii) divert or attempt to divert any business or customers of the Franchised Business to any other person or Entity, or (iii) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks.
- 12.1.2 To the extent permitted by Applicable Law, upon (i) the expiration or termination (including nonrenewal) of this Agreement, (ii) the occurrence of any Assignment, or (iii) the cession of any Restricted Person's relationship with Franchisee, each person who was a Restricted Person before such event shall not for a period of 24 months thereafter, either directly or indirectly, through one or more affiliated Entities engage in Competitive Activities within the Protected Area or within a radius of 10 miles from any then-existing Restaurant. In the event of the violation of this provision by Developer following termination or expiration of this Agreement, the period of time Developer shall be required to abide by this obligation shall be extended to a period ending 24 months after Developer is no longer in default of this obligation.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to Angry Chickz's 2025 Franchise Disclosure Document, during the term of the franchise agreement, Restricted Persons are prohibited from performing any act that is injurious or prejudicial to the goodwill associated with the Angry Chickz Marks. Specifically, Restricted Persons cannot (i) engage in any Competitive Activities, (ii) divert or attempt to divert any business or customers of the Franchised Business to any other person or Entity, or (iii) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks.
This means that anyone defined as a Restricted Person, which would include the franchisee and potentially their close associates or family members, must not take actions that could harm the Angry Chickz brand or steal business away from the franchise. This encompasses a broad range of activities, including starting a competing business, actively trying to lure customers to a different establishment, or any other behavior that could damage the reputation and customer base of the Angry Chickz franchise.
The franchise agreement also specifies that even after the agreement expires or is terminated, these restrictions continue for a period. Specifically, for 24 months after the agreement ends, Restricted Persons are prohibited from engaging in Competitive Activities within the Protected Area or within a radius of 10 miles from any then-existing Angry Chickz Restaurant. This extended restriction highlights the importance Angry Chickz places on protecting its market and brand reputation, even after a franchisee leaves the system.
These non-compete and non-interference clauses are common in franchising to protect the brand and other franchisees. Prospective Angry Chickz franchisees should carefully consider these restrictions and how they might impact their future business endeavors, especially if they plan to remain in the restaurant industry after their franchise agreement concludes.