Is the covenant not to compete in the Bang Cookies Franchise Agreement, which extends beyond termination, always enforceable under California law?

According to Bang Cookies's 2024 Franchise Disclosure Document, the enforceability of the covenant not to compete, which extends beyond the termination of the franchise, is not guaranteed under California law. The California FDD Amendment specifically addresses this issue, stating that such provisions in the Franchise Agreement may not be enforceable. This means that if a Bang Cookies franchisee in California were to leave the franchise system and start a competing business, the franchisor's ability to legally prevent them from doing so might be limited.

This lack of guaranteed enforceability stems from California's general disfavor of non-compete agreements, particularly those that restrict a person's ability to work in their chosen profession. While some exceptions exist, they are narrowly construed. This is a critical point for prospective franchisees to understand, as it affects their rights and obligations upon exiting the Bang Cookies system.

For a potential Bang Cookies franchisee in California, this has significant implications. It is crucial to seek legal counsel to fully understand the scope and limitations of the non-compete clause in the Franchise Agreement. Franchisees should be aware that while Bang Cookies includes a post-termination non-compete, its actual enforceability will depend on the specific circumstances and how California law is applied. It is advisable to consult with an attorney to assess the potential risks and benefits associated with this provision before signing the Franchise Agreement.