What actions are prohibited under the non-competition covenants during the term of the Auntie Annes franchise?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| q. Non-competition covenants during the term of the franchise | FA: 15.4 | No involvement in a competitive business (generally, similar types of businesses that offer products the same or similar to the Approved Products) anywhere. You may not divert or attempt to divert any business or potential business, misuse vendor relationships, or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Proprietary Marks and the System. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTIONS (FDD pages 86–91)
What This Means (2024 FDD)
According to Auntie Annes's 2024 Franchise Disclosure Document, during the term of the franchise agreement, franchisees are restricted from engaging in activities that compete with the Auntie Annes business. Specifically, franchisees are prohibited from involvement in any competitive business, which is generally defined as similar businesses offering products that are the same or similar to Auntie Annes' approved products.
This non-compete clause extends to any location, meaning franchisees cannot own or work for a competing business anywhere during the term of their agreement. Furthermore, franchisees are barred from diverting or attempting to divert any business or potential business away from Auntie Annes.
Additionally, franchisees must not misuse vendor relationships or perform any action that could be harmful or damaging to the goodwill associated with Auntie Annes' proprietary marks and the overall system. This is a standard practice in franchising to protect the brand and prevent franchisees from using the franchisor's resources and reputation to benefit a competing business.