factual

In the Bb.Q Chicken franchise agreement, how are acknowledgments, promises, covenants, agreements, and obligations undertaken by 'you' treated with respect to the Principal(s)?

Bb_Q_Chicken Franchise · 2025 FDD

Answer from 2025 FDD Document

  • 22.1.5 Neither you nor any of your Principals is a party to any contract, agreement, covenant not to compete or other restriction of any type which may conflict with, or be breached by, the execution, delivery, consummation and/or performance of this Agreement.
  • 22.1.6 All of your representations and warranties contained in this Agreement are complete, correct and accurate as of the date of execution of this Agreement and will survive any termination or expiration of this Agreement.

In consideration for such specialized training, trade secrets and confidential information (including, without limitation, information regarding the operational, sales, promotional and marketing methods and techniques of us and the System which are beyond the present skills and experience of you and the Principal(s) and your managers and employees), you and the Principal(s) covenant that with respect to you, during the term of this Agreement, except as otherwise approved in writing by us, which approval may be withheld or denied in our sole and absolute discretion, neither you nor any of the Principal(s) shall, either directly or indirectly, for themselves or through, on behalf of or in conjunction with any person(s), partnership or corporation:

  • (a) Divert, or attempt to divert, any business or customer of the Franchised Business to any competitor, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System or in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize the business of the Franchisor or any bb.q Chicken franchisees or Franchisor-affiliated outlets.

  • (b) Own, maintain, operate, engage in, or have any financial or beneficial interest in (including any interest in corporations, partnerships, trusts, unincorporated associations or joint ventures), advise, assist or make loans to, any business located within the United States, its territories, states 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) Divert, or attempt to divert, any business or customer of the Franchised Business hereunder to any competitor, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System or in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize the business of the Franchisor or any bb.q Chicken franchisees or Franchisor-affiliated outlets.

  • (b) Own, maintain, operate, engage in, or have any financial or beneficial interest in (including any interest in corporations, partnerships, trusts, unincorporated associations or joint ventures), advise, assist or make loans to any Competitive Business, which business is, or is intended to be, located within a one-half (0.5) mile radius of the location of any Franchised Business in the System.

  • 10.3.3 The parties acknowledge and agree that each of the covenants contained herein are reasonable limitations as to time, geographical area, and scope of activity to be restrained and do not impose a greater restraint than is necessary to protect our goodwill or other business interests.

Source: Item 23 — RECEIPTS (FDD pages 62–283)

What This Means (2025 FDD)

According to the 2025 Bb.Q Chicken Franchise Disclosure Document, the acknowledgments, promises, covenants, agreements, and obligations undertaken by the franchisee ('you') are also binding on the Principal(s). This means that any commitments or restrictions that apply to the franchisee also extend to the Principal(s) involved in the franchise agreement. The Principal(s) are essentially held to the same standards and responsibilities as the franchisee.

Specifically, Bb.Q Chicken requires that neither the franchisee nor any of the Principal(s) can be party to any contract, agreement, or covenant that conflicts with the franchise agreement. This ensures that all parties are fully committed to the Bb.Q Chicken franchise and that there are no conflicting obligations that could hinder the operation of the franchise. Additionally, the franchisee and the Principal(s) must protect Bb.Q Chicken's interests by not engaging in any competitive business or activities that could harm the brand's goodwill. This includes restrictions on diverting customers, operating competing businesses within a certain radius of a Bb.Q Chicken location, and disclosing confidential information.

These restrictions extend both during the term of the franchise agreement and for a period of two years after its expiration, termination, or transfer. This post-term non-compete clause is designed to protect Bb.Q Chicken from unfair competition by former franchisees and their Principals who may have gained knowledge and experience operating a Bb.Q Chicken restaurant. The FDD states that these covenants are considered reasonable and necessary to protect Bb.Q Chicken's goodwill and business interests.

In essence, Bb.Q Chicken holds both the franchisee and the Principal(s) jointly responsible for upholding the terms of the franchise agreement. This approach ensures that all individuals with a significant interest in the franchise are aligned in their commitment to the brand and its standards. Prospective franchisees should carefully review these obligations with their Principals to ensure everyone understands their responsibilities and the potential consequences of non-compliance.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.