During the term of the Bb.Q Chicken franchise, what is prohibited regarding operating a similar business?
Bb_Q_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise | Summary | |
|---|---|---|---|
| Agreement | |||
| k. “Transfer” by franchisee – defined | Section 14.2.1 | Includes sale, assignment, conveyance, pledge, mortgage or other encumbrance of any interest in the Franchise Agreement, the Restaurant or Food Truck or you (if you are not a natural person) | |
| l. Franchisor approval of transfer by franchisee | Section 14.2.2 | You must obtain our consent before transferring any interest. We will not unreasonably withhold our consent | |
| m. Conditions for franchisor approval of transfer | Section 14.2.2 | Conditions include: You must pay all amounts due us, not otherwise be in default, sign a general release, and pay a transfer fee. Transferee must meet our criteria, complete training to our satisfaction and sign current Franchise Agreement | |
| n. Franchisor’s right of | Section 14.4 | Within 30 days after notice, we have the | |
| first refusal to acquire | option to purchase the transferred interest on | ||
| franchisee’s business | the same terms and conditions | ||
| o. Franchisor’s option to purchase franchisee’s business | Section 18.11 | Upon termination or expiration of the Franchise Agreement, we have the right to purchase certain assets of the Franchised Business | |
| p. Death or disability of franchisee | Section 14.5 | The Franchise Agreement will terminate upon your death or permanent disability, and the Franchised Business must be transferred within six months to a replacement franchisee that we approve. | |
| q. Non-competition | Section 10.3.1 | You are prohibited from operating or having | |
| covenants during the | an interest in a similar business without our | ||
| term of the franchise | prior written consent, subject to state law. | ||
| 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 Franchise |
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, during the term of the franchise agreement, franchisees are generally prohibited from operating or having any ownership interest in a similar business. However, this prohibition is not absolute. Bb.Q Chicken may grant prior written consent allowing a franchisee to operate or have an interest in a similar business, and this is subject to state law. For multi-unit operators, this restriction does not apply to other Bb.Q Chicken Restaurants or Food Trucks operated under franchise agreements with them.
This non-compete clause is a standard provision in franchise agreements. It protects Bb.Q Chicken's brand and market share by preventing franchisees from using the franchisor's confidential information and business model to compete against the system while they are still a part of it. The clause aims to ensure that franchisees focus their efforts on growing their Bb.Q Chicken business and do not divert resources or knowledge to competing ventures.
It is important to note that the enforceability of non-compete clauses can vary by state. Some states have stricter regulations regarding these clauses, including limitations on their duration and geographic scope. A prospective Bb.Q Chicken franchisee should consult with a legal professional to understand the specific laws in their state and how they may affect the enforceability of the non-compete provision in the franchise agreement. The franchisee should also clarify with Bb.Q Chicken what constitutes a "similar business" to fully understand the scope of the restriction.