What is the geographic scope of the non-compete restriction for a Restricted Person after the expiration or termination of the Angry Chickz 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 the 2025 Angry Chickz Franchise Disclosure Document, a Restricted Person is subject to a non-compete agreement for 24 months after the expiration or termination of the franchise agreement. This prevents them from engaging in Competitive Activities within the Protected Area or within a 10-mile radius of any then-existing Angry Chickz Restaurant.
The term 'Restricted Person' includes the franchisee and other individuals associated with the franchise who have access to confidential information. 'Competitive Activities' would likely include owning, operating, or being involved with a business that offers similar products or services to Angry Chickz. The 'Protected Area' is defined in the franchise agreement and typically refers to the exclusive territory granted to the franchisee.
This non-compete obligation is extended if the Developer violates the provision after termination or expiration, lasting until 24 months after the Developer is no longer in default of the obligation. This clause aims to protect Angry Chickz's market share and confidential information by preventing former franchisees or associated individuals from directly competing with the brand shortly after their involvement ends. Prospective franchisees should carefully consider the scope and duration of this restriction, as it could limit their future business opportunities.