After the Beggars Pizza agreement ends, for how long is the franchisee restricted from operating a competing business?
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, a franchisee is restricted from operating a competing business for a period of two years after the franchise agreement ends. This restriction begins from the date of a permitted transfer, the expiration of the agreement, the termination of the agreement (regardless of the cause), or a final order from an arbitrator or court.
Specifically, the franchisee cannot own, maintain, operate, be employed by, provide assistance to, or have any interest in a business that offers or sells pizza, pizza products, Italian-style food, or similar food items to those offered by Beggars Pizza. This restriction applies to businesses located within the franchisee's territory, within ten miles of the approved Beggars Pizza location, or within ten miles of any other Beggars Pizza business.
However, these restrictions do not apply if the franchisee operates another Beggars Pizza business under a separate franchise agreement with the company. This post-term covenant aims to protect Beggars Pizza's market and brand integrity by preventing former franchisees from directly competing using the knowledge and resources gained during their time with the franchise.