What is the geographic limit of the non-competition covenant for a former Bens Soft Pretzels franchisee?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Agreement | Summary | |
|---|---|---|---|
| o. | Franchisor’s option to purchase franchisee’s business | Section 14B | Option to purchase some or all equipment, supplies, inventory, advertising materials and any items with our logo, for cash at fair market value, exercisable up to 90 days after termination or expiration. If no agreement on fair market value, an appraiser appointed by us will decide. |
| p. | Death or disability of franchisee | Section 11E | You must assign franchise to an approved buyer within 180 days. All transfer provisions of section 8 of the franchise agreement apply. |
| q. | Non-competition covenants during the term of the franchise | Section 10D | No store or food business which includes the sale of pretzels where the sale of pretzels is more than 10% of the overall revenue of the business, nor an organization franchising a similar business (subject to state law). |
| r. | Non-competition covenants after the franchise is terminated or expires | Section 10D | No store or food business which includes the sale of pretzels where the sale of pretzels is more than 10% of the overall revenue of the business for 1 year within 5 miles of your former store location, or within 5 miles of any other BEN’S SOFT PRETZELS store. No organization franchising a similar business for 1 year. No solicitation or acceptance of business from former customers for 1 year (subject to state law). |
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 37–42)
What This Means (2025 FDD)
According to Bens Soft Pretzels's 2025 Franchise Disclosure Document, a former franchisee is subject to a non-competition covenant that restricts their activities after the franchise is terminated or expires. Specifically, the franchisee cannot operate a store or food business that includes the sale of pretzels, where pretzel sales constitute more than 10% of the business's overall revenue. This restriction applies for one year.
The geographic scope of this restriction extends to two areas: within 5 miles of the franchisee's former Bens Soft Pretzels store location, and within 5 miles of any other Bens Soft Pretzels store. This means a franchisee is limited from opening a competing pretzel business near their old location or any existing location for the brand.
In addition to the geographic and business-type restrictions, the non-competition covenant also prohibits a former franchisee from soliciting or accepting business from former customers for one year. It is important to note that all these non-competition covenants are subject to state law, which may impose additional limitations or requirements.