What is the geographic limit of the non-competition covenant after termination or expiration of a Bens Soft Pretzels franchise?
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 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 34–37)
What This Means (2025 FDD)
According to Bens Soft Pretzels's 2025 Franchise Disclosure Document, after the franchise agreement expires or is terminated, a franchisee is restricted from engaging in a competing business for one year. This restriction applies within 5 miles of the former Bens Soft Pretzels store location or within 5 miles of any other Bens Soft Pretzels store. A competing business is defined as any store or food business where the sale of pretzels accounts for more than 10% of the overall revenue.
This non-compete clause prevents former franchisees from leveraging the knowledge and experience gained while operating a Bens Soft Pretzels franchise to directly compete with the brand in close proximity to existing locations. The geographic restriction ensures that other franchisees or company-owned stores are not undermined by a former franchisee opening a similar business nearby. The clause also restricts a former franchisee from involvement with any organization that franchises a similar business for one year.
It is important to note that these non-competition covenants are subject to state law, which may impact their enforceability. Prospective franchisees should consult with legal counsel to understand the specific implications and enforceability of these covenants in their state. Additionally, the definition of 'you' in the non-compete covenants is broad, potentially including owners, guarantors, officers, directors, members, managers, partners, and their immediate family members, meaning their actions could also trigger an injunction or termination of the Franchise Agreement.