What is the geographic scope of the non-compete covenant for Bens Soft Pretzels after the agreement terminates?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
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- You covenant that you will not, for a period of one year after the expiration or termination of this Agreement, or after the expiration of any Interim Period, regardless of the cause of termination, or within one year of the sale of the Store or any interest in you, either directly or indirectly, for yourself, or through, on behalf of, or in conjunction with any person or entity, own, manage, operate, maintain, engage in, consult with or have any interest in a Competing Business:
- a. At the premises of the former Store;
- b. Within 5 miles of the Store; or
- c. Within 5 miles of any other business or store using the BEN'S SOFT PRETZELS System, whether franchised or owned by us or our affiliates.
For purposes of this Section 10.D, a Competing Business includes any 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.
Source: Item 22 — CONTRACTS (FDD pages 46–47)
What This Means (2025 FDD)
According to the 2025 Bens Soft Pretzels Franchise Disclosure Document, after the franchise agreement expires or terminates, the franchisee is restricted from engaging in a Competing Business for one year. A Competing Business is defined as any store or food business where the sale of pretzels accounts for more than 10% of the business's overall revenue.
The geographic scope of this restriction includes three specific locations. First, the franchisee cannot operate a Competing Business at the premises of the former Bens Soft Pretzels store. Second, they are prohibited from operating a Competing Business within 5 miles of their former Bens Soft Pretzels store. Third, the franchisee is barred from operating a Competing Business within 5 miles of any other business or store operating under the Bens Soft Pretzels system, whether it is a franchised or company-owned location.
This non-compete agreement is in place regardless of the reason for termination or expiration of the franchise agreement, or within one year of the sale of the store or any interest in the franchisee's business. This means that even if the franchisee sells their business, they are still subject to the non-compete restrictions for one year following the sale. The term "you" in the non-compete agreement includes all owners, guarantors, officers, directors, members, managers, partners, and holders of any ownership interest in the franchisee, as well as their immediate family members, including spouses and children.