What is the duration of the non-compete period for a Bb.Q Chicken franchisee after the transfer of all interests in the agreement?
Bb_Q_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
12.2 You covenant that, except as otherwise approved in writing by us, you shall not, for a continuous and uninterrupted period commencing upon the expiration or termination of this Agreement, or upon transfer, and continuing for two (2) years thereafter (and, in case of any violation of this covenant, for two (2) years after the violation ceases), either directly or indirectly, for yourself, or through, on behalf of or in conjunction with any person, persons, partnership or corporation, own, maintain, advise, help, invest in, make loans to, be employed by, engage in or have any interest in any Competitive Business which is located within twenty (20) miles of any bb.q Chicken Franchised Business in the System.
12.3 Subsections 12.1.3 and 12.2 of this Section shall not apply to ownership by you of less than a five percent (5%) beneficial interest in the outstanding equity securities of any corporation which is registered under the Securities Exchange Act of 1934, as amended.
12.4 The parties agree that each of the foregoing covenants shall be construed as independent of any other covenant or provision of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 62–283)
What This Means (2025 FDD)
According to Bb.Q Chicken's 2025 Franchise Disclosure Document, a franchisee is subject to a non-compete agreement for two years after transferring all interests in the franchise agreement. Specifically, the franchisee cannot own, maintain, advise, help, invest in, make loans to, be employed by, engage in, or have any interest in any Competitive Business within twenty (20) miles of any Bb.Q Chicken Franchised Business in the System. This restriction applies to the franchisee and their principals.
The non-compete restrictions begin immediately upon the transfer of the franchise and continue uninterrupted for the two-year duration. This prevents a former franchisee from leveraging their knowledge of Bb.Q Chicken's operations and customer base to directly compete with existing franchises. The definition of a Competitive Business includes any restaurant or food service business with a similar character and concept to Bb.Q Chicken, including those offering similar food products.
There is an exception to the non-compete if the franchisee owns less than a five percent (5%) beneficial interest in the outstanding equity securities of any corporation registered under the Securities Exchange Act of 1934, as amended. The FDD states that the parties agree that each of the covenants shall be construed as independent of any other covenant or provision of the Agreement. The franchisee and Bb.Q Chicken agree that the covenants are reasonable limitations regarding time, geographical area, and scope of activity to be restrained and do not impose a greater restraint than necessary to protect Bb.Q Chicken's goodwill or other business interests.