After the Bb.Q Chicken franchise is terminated or expires, what is the geographic limit of the non-competition covenant?
Bb_Q_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise | Summary | |
|---|---|---|---|
| r. Non-competition covenants after the franchise is terminated or expires | Section 10.3.2 | You and your Principals are prohibited for two years from expiration or termination of the franchise from operating or having an interest in a similar business within 20 miles of any Franchised Business in the System, subject to state law. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 49–55)
What This Means (2025 FDD)
According to Bb.Q Chicken's 2025 Franchise Disclosure Document, if the franchise is terminated or expires, the franchisee and their principals are restricted from operating or having an interest in a similar business for two years. This restriction applies within a 20-mile radius of any Bb.Q Chicken franchised business in the system. This covenant is subject to state law, which means the enforceability and specific terms may vary depending on the state where the franchise operates.
This non-compete clause prevents former franchisees from directly competing with the Bb.Q Chicken system shortly after their franchise agreement ends. The 20-mile radius aims to protect existing franchisees and the brand's market share by limiting the potential for competition from someone who recently operated a Bb.Q Chicken restaurant. The two-year duration provides a reasonable timeframe for Bb.Q Chicken to maintain its competitive advantage without unduly restricting the former franchisee's ability to pursue other business ventures long-term.
It is important for prospective franchisees to understand the implications of this non-compete agreement. They should consider how this restriction might affect their future business plans if they decide to leave the Bb.Q Chicken system. Additionally, franchisees should be aware that the enforceability and specific terms of the non-compete agreement can vary based on state laws, so consulting with legal counsel is advisable to fully understand their rights and obligations.
This type of post-term non-compete agreement is common in franchising to protect the brand and other franchisees in the system. The specific terms, such as the duration and geographic scope, can vary among different franchise systems. Therefore, prospective franchisees should carefully review the non-compete provisions in any franchise agreement before investing.