Does the Bens Soft Pretzels non-compete covenant apply to immediate family members?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
Unless otherwise specified, the term "you" as used in this subparagraph 10.D includes, collectively and individually, all Owners, guarantors, officers, directors, members, managers, partners, as the case may be, and holders of any ownership interest in you and any immediate family members of same including spouses and children. We may require you to obtain from your manager and other individuals identified in the preceding sentence a signed non-compete agreement in a form satisfactory to us that contains the noncompete provisions of this subparagraph 10.D.
Source: Item 22 — CONTRACTS (FDD pages 46–47)
What This Means (2025 FDD)
According to the 2025 Bens Soft Pretzels Franchise Disclosure Document, the non-compete covenants apply not only to the franchisee but also to other related parties. The term "you" in the context of the non-compete agreement includes all owners, guarantors, officers, directors, members, managers, partners, and holders of any ownership interest in the franchisee entity. This definition extends to immediate family members, including spouses and children of these individuals.
This broad definition means that these individuals are also restricted from engaging in activities that would violate the non-compete covenants. Bens Soft Pretzels may require these individuals to sign a separate non-compete agreement to ensure compliance.
The non-compete covenants restrict the franchisee and related parties from owning, managing, operating, or having any interest in any other store or food business other than the one authorized by the Franchise Agreement during the term of the agreement. After the agreement expires or terminates, or after the sale of the store, the non-compete restriction lasts for one year. This restriction applies to any Competing Business (defined as a store or food business where the sale of pretzels is more than 10% of the overall revenue) located at the former store premises, within 5 miles of the store, or within 5 miles of any other Bens Soft Pretzels location.
This extended non-compete clause is designed to protect Bens Soft Pretzels's interests by preventing those closely associated with the franchisee from using the franchisor's confidential information and goodwill to compete against the franchise, even after the franchisee is no longer directly involved. Prospective franchisees should carefully consider the implications of this extended non-compete, as it can significantly impact the business activities of their immediate family members.