What is the geographic limit of the non-competition covenant after the Bb.Q Chicken franchise is terminated or expires?
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 engaging in any similar business. This restriction lasts for two years from the date of termination or expiration. The geographic scope of this non-compete agreement extends to a 20-mile radius of any Bb.Q Chicken franchised business within the system. This post-term non-compete is subject to state law.
This means that after leaving the Bb.Q Chicken system, a former franchisee cannot open or be involved with a competing restaurant within that 20-mile radius. This could significantly limit the franchisee's options if they wish to remain in the food service industry in the same area after their franchise agreement ends. The franchisee should carefully consider the implications of this restriction, especially if they have built significant ties to their local community.
It is important to note that the non-compete agreement is subject to state law, which means that the enforceability and specific terms may vary depending on the state in which the franchise operates. Some states may have stricter rules regarding non-compete agreements, potentially affecting the scope or enforceability of the clause. A prospective franchisee should consult with a legal professional to understand how state laws may impact this provision.
This type of non-compete clause is fairly standard in the franchise industry, as franchisors seek to protect their brand and prevent former franchisees from using proprietary information or business models to compete against the system. However, the specific terms, such as the duration and geographic scope, can vary between different franchise systems. Therefore, it is crucial for a prospective franchisee to carefully review and understand the non-compete provisions before investing in a Bb.Q Chicken franchise.