What is a franchisee of Bb.Q Chicken prohibited from doing that would divert business to a competitor?
Bb_Q_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
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").
Source: Item 23 — RECEIPTS (FDD pages 62–283)
What This Means (2025 FDD)
According to the 2025 Bb.Q Chicken Franchise Disclosure Document, a franchisee is prohibited from diverting or attempting to divert business away from their Bb.Q Chicken franchise to a competitor. This restriction applies both during the term of the Franchise Agreement and for a period of two years after the agreement's expiration, termination, or transfer of interest. This restriction is in place to protect Bb.Q Chicken's goodwill, trademarks, and overall business interests.
Specifically, franchisees and their principals are barred from directly or indirectly inducing customers to patronize a competitor. They cannot perform any action that could harm the goodwill associated with the Bb.Q Chicken brand or interfere with the business of the franchisor or other Bb.Q Chicken franchisees. This includes actions that could disrupt, decrease, or jeopardize the business of the Bb.Q Chicken system.
Furthermore, franchisees are restricted from owning, operating, or having a financial interest in a competing business within a 0.5-mile radius of any Bb.Q Chicken franchise location. This encompasses various forms of involvement, such as advising, assisting, or providing loans to a competing business. The FDD states that these covenants are considered reasonable in terms of time, geographical area, and scope, and are necessary to protect Bb.Q Chicken's business interests.
These non-compete and non-diversion clauses are standard in franchising to protect the brand and prevent franchisees from using the franchisor's knowledge and resources to benefit a competing business. Prospective Bb.Q Chicken franchisees should carefully consider these restrictions and how they might impact their future business endeavors after leaving the franchise system.