After the Bb.Q Chicken franchise is terminated or expires, what non-competition covenants apply to the franchisee and their Principals?
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, both the franchisee and their Principals are subject to non-competition covenants following the termination or expiration of the franchise agreement. Specifically, for a period of two years after the franchise ends, franchisees and their Principals are prohibited from operating or having any financial interest in a similar business. This restriction applies within a 20-mile radius of any Bb.Q Chicken franchised business operating within the system. These covenants are subject to state law, which means the enforceability and specific terms may vary depending on the location of the franchise.
This non-compete clause is a standard practice in franchising to protect the brand and prevent franchisees from using the franchisor's proprietary information and business model to compete against the system after leaving. The definition of 'similar business' is critical, as it determines the scope of activities restricted. Franchisees should carefully review this definition with legal counsel to understand what types of businesses would be considered competitive.
The geographic scope of 20 miles can significantly limit a former franchisee's options, especially in densely populated areas. The two-year duration is also a substantial commitment, as it can impact the franchisee's ability to re-enter the food service industry. Prospective franchisees should consider these restrictions carefully, especially if they have significant experience or plans for future ventures in the same or similar sectors. It is important to note that the enforceability of non-compete agreements can vary by state, and some states have stricter regulations than others.