After the Bb.Q Chicken franchise is terminated or expires, what are the non-competition restrictions for 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 face certain non-competition restrictions following the termination or expiration of the franchise agreement. Specifically, they are prohibited from operating or having any interest in a similar business for a period of two years. This restriction applies within a 20-mile radius of any Bb.Q Chicken franchised business in the system.
This non-compete clause is a standard provision in franchise agreements, designed to protect Bb.Q Chicken's market share and brand reputation. By preventing former franchisees from immediately opening a competing business nearby, Bb.Q Chicken aims to maintain a competitive advantage and prevent the franchisee from using inside knowledge to unfairly compete.
However, the FDD also notes that these non-competition covenants are subject to state law. This means that the enforceability and specific terms of the non-compete agreement may vary depending on the state in which the franchise is located. Some states have stricter rules regarding non-compete agreements, and may limit their duration, geographic scope, or applicability.
Prospective franchisees should carefully review Section 10.3.2 of the Franchise Agreement and consult with an attorney to understand the specific non-competition restrictions that will apply to them and their Principals in their state. Understanding these restrictions is crucial for planning future business ventures after the franchise term ends.