What happens if a Bb.Q Chicken franchisee violates the non-compete agreement?
Bb_Q_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
h are beyond the present skills and experience of you and the Principal(s). You and the Principal(s) acknowledge that such specialized training, trade secrets and confidential information provide a competitive advantage and will be valuable to them in the development and operation of the Franchised Business, and that gaining access to such specialized training, trade secrets and confidential information is, therefore, a primary reason why they are entering into this Agreement. 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, franchisees and their principals agree to certain non-compete obligations during the term of the franchise agreement. Specifically, they cannot divert business from the Bb.Q Chicken franchise to competitors, nor can they operate or have a financial interest in a similar competitive business within the United States or any area where Bb.Q Chicken has registered its trademarks. This restriction applies unless Bb.Q Chicken provides written approval otherwise.
After the franchise agreement expires, terminates, or if the franchisee transfers their interest, a similar non-compete restriction applies for two years. During this period, the franchisee and principals are prohibited from diverting business or engaging in activities that harm the goodwill associated with the Bb.Q Chicken brand. These restrictions are in place to protect Bb.Q Chicken's confidential information, trade secrets, and the overall integrity of the franchise system.
While the FDD excerpt outlines the non-compete obligations, it does not explicitly detail the specific penalties or legal actions Bb.Q Chicken might take if a franchisee violates these terms. It states that franchisees agree not to perform any act injurious to the goodwill associated with the Marks and the System. A prospective franchisee should seek clarification from Bb.Q Chicken regarding the remedies available to the franchisor in the event of a breach of the non-compete agreement. This might include financial penalties, injunctive relief, or other legal recourse.