What actions trigger the start of the post-term covenant for a Beggars Pizza franchise?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
- 17.3 Post-Term Covenants. Franchisee covenants that, except as otherwise approved in writing by Franchisor, Franchisee will not, for a continuous uninterrupted period of two (2) years commencing upon the date of (a) a transfer permitted under Section 14, (b) expiration of the Agreement, (c) termination of the Agreement regardless of the cause for termination, (d) a final order of a duly authorized arbitrator, panel of arbitrators, or a court of competent jurisdiction (after all appeals have been taken) with respect to any of the foregoing or with respect to enforcement of this Section 17.3, or (e) any or all of the foregoing, either directly or indirectly for itself, or through, on behalf of, or in conjunction with any person or legal entity, own, maintain, operate, engage in, be employed by, provide assistance to, or have any interest in (as owner or otherwise) any business that (a) offers or sells pizza, pizza products, Italian-style food, or other food items that are the same as or similar to the products being offered by the Restaurant under the System, and (b) is, or is intended to be, located at or within:
- 17.3.1 Franchisee's Territory;
- 17.3.2 Ten (10) miles of the Approved Location; or
- 17.3.3 Ten (10) miles of any business operating under the Proprietary Marks;
provided, however, that Section 17.2.2 and Section 17.3 will not apply to the operation by Franchisee of any business under the System that is franchised by Franchisor to Franchisee under a written franchise agreement.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, the post-term covenant, which restricts a franchisee's activities after the franchise relationship ends, is triggered by several events. This covenant lasts for a continuous, uninterrupted period of two years.
The triggering events include (a) a transfer permitted under Section 14 of the agreement, which likely refers to the transfer of the franchise to a new owner, (b) the expiration of the Franchise Agreement, meaning the natural end of the agreed-upon term, (c) termination of the Agreement, regardless of the reason for termination, whether by the franchisor or franchisee, (d) a final order from an arbitrator or court of competent jurisdiction after all appeals have been exhausted, related to the agreement or enforcement of the post-term covenant, or (e) any combination of the above.
During this two-year period, unless Beggars Pizza provides written approval, the franchisee is restricted from owning, maintaining, operating, or being involved in any business that offers or sells pizza, pizza products, Italian-style food, or similar items. This restriction applies to businesses located within the franchisee's territory, within ten miles of the approved location of the former Beggars Pizza restaurant, or within ten miles of any other Beggars Pizza location. However, these restrictions do not apply if the franchisee operates another Beggars Pizza franchise under a separate agreement with the franchisor.