What is the definition of 'Restricted Territory' for Best In Class Education Center franchisees?
Best_In_Class_Education_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
"Restricted Territory" means the geographic area within a 25-mile radius from: (a) your Center (including your Center's premises); (b) any Satellite Office you develop (including your Satellite Office's premises); and (c) any other Center or Satellite Office that is operating or under construction when the Post-Term Restricted Period begins; provided, however, that if a court of competent jurisdiction determines the foregoing Restricted Territory is too broad to be enforceable then Restricted Territory means the geographic area within a 25-mile radius from: (a) your Center (including your Center's premises); (b) any Satellite Office you develop (including your Satellite Office's premises).
"Satellite Office" means a Best In Class Education Center that: (a) consists of "temporary space" that is not subject to a lease of more than 12 months in duration; and (b) consists of space that is shared between you (or other owner of the Satellite Office) and one or more other businesses or organizations. Examples include churches, temples, libraries, HOA buildings, YMCAs, Boys & Girls Clubs, community centers, schools, and similar types of facilities.
Source: Item 23 — RECEIPT (FDD pages 47–204)
What This Means (2025 FDD)
According to the 2025 Best In Class Education Center FDD, a franchisee's "Restricted Territory" is defined as the geographic area within a 25-mile radius of their center's premises, any Satellite Office they develop, and any other Best In Class Education Center or Satellite Office operating or under construction when the Post-Term Restricted Period begins. A Satellite Office is a Best In Class Education Center that consists of temporary space that is not subject to a lease of more than 12 months and consists of space that is shared between the franchisee and one or more other businesses or organizations.
This definition places a restriction on where a former franchisee can operate a competing business after the franchise agreement ends. The 25-mile radius is measured not only from the franchisee's primary center but also from any satellite locations they may have established. This could significantly limit the areas where a franchisee can operate a similar business post-term, especially if they have multiple satellite locations.
However, the FDD also includes a caveat: if a court deems the 25-mile radius too broad to be enforceable, the Restricted Territory will still include the area within a 25-mile radius of the franchisee's center and any Satellite Office they develop. This suggests that the franchisor recognizes the possibility of the initial restriction being challenged and has a fallback definition in place.
Prospective franchisees should be aware of these restrictions and consider their implications for future business opportunities. It would be prudent to consult with a legal professional to understand the enforceability of these restrictions in their specific jurisdiction and to assess how they might impact their long-term business plans after leaving the Best In Class Education Center system.