What constitutes a 'reasonable area' when determining unfair competition by Better Blend against a franchisee without an exclusive territory?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
If the Franchise Agreement is terminated before the Territory is determined, then the area of non-competition will be the Site Selection Area and within five miles the territory of any other Better Blend business operating on the date of termination.
If a given Better Blend business does not have a defined territory, then for purposes of this Section its territory will be deemed to be a 3-mile radius.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, the definition of a 'reasonable area' for non-competition depends on whether the franchise agreement is terminated before a territory is determined or if the Better Blend business operates without a defined territory.
If the Franchise Agreement is terminated before the territory is determined, the non-competition area will be the Site Selection Area and within five miles of any other Better Blend business operating on the date of termination. This means a franchisee would be restricted from operating a competing business within this defined area.
For a Better Blend business that does not have a defined territory, the FDD states that its territory will be considered a 3-mile radius for non-compete purposes. Therefore, if a franchisee without a defined territory leaves the Better Blend system, they would be restricted from operating a competing business within a 3-mile radius of their former location. This also applies to the territory of any other Better Blend business.