What is the geographic restriction on operating a Competitive Business after the termination of a Bb.Q Chicken franchise agreement?
Bb_Q_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
ates 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").
- 10.3.2 With respect to you and each Principal, and for a continuous uninterrupted period commencing upon the expiration, termination of, or transfer of all of your or any Principals' interest in, this Agreement and continuing for two (2) years thereafter, except as otherwise approved in our sole and absolute discretion, neither you, nor any of the Principal(s) shall, directly or indirectly, for themselves, or through, on behalf of or in conjunction with any person, persons, partnership, or corporation:
- (a) Divert, or attempt to divert, any business or customer of the Franchised Business hereunder 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 Competitive Business, which business is, or is intended to be, located within a one-half (0.5) mile radius of the location of any Franchised Business in the System.
Source: Item 23 — RECEIPTS (FDD pages 62–283)
What This Means (2025 FDD)
According to Bb.Q Chicken's 2025 Franchise Disclosure Document, franchisees and their principals face certain restrictions regarding competitive business activities following the termination or transfer of the franchise agreement. Specifically, for a period of two years after the agreement's end, they are prohibited from owning, maintaining, operating, or having a financial interest in any Competitive Business. This restriction applies to businesses located within a 0.5-mile radius of any Bb.Q Chicken Franchised Business in the System.
This non-compete clause prevents former franchisees from leveraging their knowledge and experience gained from operating a Bb.Q Chicken franchise to directly compete with the brand. The 0.5-mile radius serves to protect existing Bb.Q Chicken locations from immediate competition by a former franchisee who might try to capitalize on established customer relationships or brand recognition. The clause extends not only to the franchisee but also to their principals, ensuring that all involved parties are bound by the agreement.
The FDD also states that these covenants are considered reasonable in terms of time, geographical area, and scope, and are deemed necessary to protect Bb.Q Chicken's goodwill and business interests. Furthermore, the agreement specifies that if any part of the covenant is deemed unenforceable, the parties agree to be bound by a lesser covenant that imposes the maximum duty permitted by law. This ensures that some form of restriction remains in place, to the fullest extent legally possible.
Prospective franchisees should carefully consider these post-termination restrictions, as they could significantly impact their ability to pursue other business ventures in the food service industry after leaving the Bb.Q Chicken system. It is advisable to seek legal counsel to fully understand the implications of these covenants and how they might affect future career options.