After termination or expiration of a Bens Soft Pretzels franchise, what non-competition covenants apply to the 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, after the franchise is terminated or expires, several non-competition covenants apply to the franchisee for a period of one year. 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 within a 5-mile radius of the former Bens Soft Pretzels store location or within 5 miles of any other Bens Soft Pretzels store.
Additionally, the franchisee is prohibited from being involved with an organization that franchises a similar business for one year. The FDD also states that the franchisee cannot solicit or accept business from former customers for one year, although this is subject to state law, implying that the enforceability of this clause may vary depending on the jurisdiction.
These non-competition covenants are detailed in Section 10D of the franchise agreement. Prospective franchisees should carefully review this section and understand the implications of these restrictions, especially if they plan to remain in the food service industry or a related franchising business after their Bens Soft Pretzels franchise agreement ends. It is also important to consult with a legal professional to understand how state laws may affect the enforceability of these covenants.