What section of the Angry Chickz Franchise Agreement outlines the franchisee's obligations regarding non-competition covenants?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
ARTICLE 12 COVENANTS REGARDING OTHER BUSINESS INTERESTS
- 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.
12.2 Confidential Information.
12.2.1 Restricted Persons may have access to proprietary and trade secret information, including the Confidential Information, Standards, recipes, secret ingredients, procedures, concepts and methods and techniques of developing and operating a Restaurant and producing Authorized Products. Company may disclose certain of its Confidential Information to Restricted Persons in the Manual(s), bulletins, supplements, confidential correspondence, or other
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 24–25)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, the franchisee's obligations regarding non-competition are outlined in Article 12 of the Franchise Agreement, titled "COVENANTS REGARDING OTHER BUSINESS INTERESTS". Specifically, section 12.1 addresses non-competition, acknowledging the distinctive nature of the Angry Chickz system and the franchisee's access to confidential information.
During the term of the agreement, a "Restricted Person" is prohibited from engaging in any Competitive Activities, diverting business or customers, or performing any act injurious to the goodwill associated with the Angry Chickz marks. The term "Restricted Person" is not defined in this section.
Upon expiration or termination of the agreement, assignment, or cessation of a Restricted Person's relationship with the franchisee, these individuals are restricted from engaging in Competitive Activities within the Protected Area or within a 10-mile radius of any existing Angry Chickz Restaurant for a period of 24 months. Violation of this provision by a developer extends the obligation period to 24 months after the default ceases. This means that after the franchise agreement ends, the franchisee cannot open a competing business near an existing Angry Chickz location for two years.
The Franchise Agreement also addresses confidential information in section 12.2, noting that Restricted Persons may have access to proprietary and trade secret information, including Confidential Information, Standards, recipes, secret ingredients, procedures, concepts, methods, and techniques of developing and operating a Restaurant and producing Authorized Products. Angry Chickz may disclose certain of its Confidential Information to Restricted Persons in the Manual(s), bulletins, supplements, confidential correspondence, or other documents.