Does the Bang Cookies franchise agreement specify the geographic boundaries of the 'Restricted Territory'?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
"Restricted Territory" refers to and means the geographic area: (a) comprising Franchisee's
Designated Territory; (b) comprising a 25 mile radius surrounding Franchisee's Designated Territory or, if Franchisee is not granted or designated a designated territory, then a 25 mile radius surrounding Franchisee's Shop Location; (c) comprising a 10 mile radius surrounding the Shop Locations for all other Bang Cookies Shops operating and/or under development as of the Effective Date of this Agreement; and (d) comprising a 10 mile radius surrounding the Shop Locations for all other Bang Cookies Shops that are in operation or under development during all or any part of the Post-Term Restricted Period; provided, however, that if a court of competent jurisdiction determines that the foregoing Restricted Territory is too broad to be enforceable, then the "Restricted Territory" means the geographic area comprising Franchisee's Designated Territory plus a 25 mile radius surrounding Franchisee's Designated Territory or, if Franchisee is not granted or designated a designated territory, then a 25 mile radius surrounding Franchisee's Shop Location.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, the franchise agreement does define the geographic boundaries of the 'Restricted Territory'. The 'Restricted Territory' is defined as (a) the franchisee's Designated Territory; (b) a 25-mile radius surrounding the franchisee's Designated Territory, or if no Designated Territory exists, a 25-mile radius around the Shop Location; (c) a 10-mile radius surrounding the Shop Locations for all other Bang Cookies Shops operating and/or under development as of the agreement's Effective Date; and (d) a 10-mile radius surrounding the Shop Locations for all other Bang Cookies Shops in operation or under development during any part of the Post-Term Restricted Period.
However, the agreement also includes a clause that addresses the possibility of the defined Restricted Territory being deemed unenforceable by a court. In such a case, the 'Restricted Territory' would be redefined as the franchisee's Designated Territory plus a 25-mile radius around it, or if there is no Designated Territory, a 25-mile radius surrounding the franchisee's Shop Location.
This definition of the 'Restricted Territory' is important for prospective franchisees as it outlines the area in which they are protected from competition from other Bang Cookies locations. It also defines the area in which they may be restricted from operating a similar business should they leave the Bang Cookies system. The inclusion of a clause addressing potential unenforceability suggests that the franchisor has considered the legal limitations on non-compete agreements and has attempted to create a definition that is both protective of the brand and legally sound.