Following the termination of a Bb.Q Chicken franchise agreement, can the franchisee or principal operate a competing business if they obtain approval?
Bb_Q_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
ates or commonwealths, or any other country, province, state or geographic area in which we have used, sought registration of or registered the same or similar Marks or operates or licenses others to operate a business under the same or similar Marks, which business is of a character and concept similar to the Franchised Business, including a food service business which offers and sells the same or similar food products (a "Competitive Business").
- 10.3.2 With respect to you and each Principal, and for a continuous uninterrupted period commencing upon the expiration, termination of, or transfer of all of your or any Principals' interest in, this Agreement and continuing for two (2) years thereafter, except as otherwise approved in our sole and absolute discretion, neither you, nor any of the Principal(s) shall, directly or indirectly, for themselves, or through, on behalf of or in conjunction with any person, persons, partnership, or corporation:
- (a) Di
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 or principal is restricted from operating a competitive business after the termination of their franchise agreement. Specifically, for a period of two years after the expiration, termination, or transfer of interest in the franchise agreement, neither the franchisee nor any principal can own, maintain, operate, engage in, or have any financial interest in a Competitive Business within a one-half (0.5) mile radius of any Bb.Q Chicken Franchised Business in the System. However, this restriction can be waived if Bb.Q Chicken provides approval in its sole and absolute discretion.
This non-compete clause prevents former franchisees from leveraging the knowledge and experience gained while operating a Bb.Q Chicken franchise to directly compete with the brand. The geographical restriction ensures that a former franchisee cannot immediately open a similar restaurant nearby and draw customers away from existing Bb.Q Chicken locations. The clause applies not only to the franchisee but also to any principal involved in the franchise agreement, broadening the scope of the restriction.
The ability for Bb.Q Chicken to grant approval at its discretion introduces an element of flexibility. This might allow a former franchisee to operate a competing business under specific circumstances, such as in a location where it would not significantly impact existing franchises or if the new business is sufficiently differentiated from Bb.Q Chicken. However, franchisees should be aware that approval is not guaranteed and is entirely at Bb.Q Chicken's discretion.
Franchisees should carefully consider the implications of this non-compete clause before entering into a franchise agreement with Bb.Q Chicken. It is important to understand the limitations it places on future business ventures and to assess the likelihood of obtaining approval to operate a competing business should they decide to leave the Bb.Q Chicken system. Seeking legal counsel to review the franchise agreement and clarify the terms of the non-compete clause is advisable.