What happens to the non-compete agreement if Beverly Anns Cookie transfers the Franchise Agreement?
Beverly_Anns_Cookie Franchise · 2025 FDDAnswer from 2025 FDD Document
The obligations contained in this Section 25 shall be referred to as your "Post Term Obligations." After the termination, expiration or Transfer of this Franchise Agreement, you agree to undertake each and every one of the obligations listed in this Section.
Cease Operations
Immediately cease to operate the Franchised Business under this Franchise Agreement and the System. You agree to not hold yourself out to the public as a present or former franchise owner of the Franchised Business.
Intellectual Property
Immediately cease to use the Intellectual Property in any manner whatsoever and not use any trademarks or trade names that may be confusingly similar to the Intellectual Property. You acknowledge and agree that any continued use of the Marks would constitute trademark infringement.
Monetary Obligations
Pay us all amounts you owe us and our affiliates within 15 days.
Surviving Covenants
Comply with all covenants described in this Section and otherwise in this Franchise Agreement that apply after the expiration, termination or Transfer of this Franchise Agreement or of an ownership interest by an Owner.
Source: Item 23 — RECEIPTS (FDD pages 57–235)
What This Means (2025 FDD)
According to Beverly Anns Cookie's 2025 Franchise Disclosure Document, if the Franchise Agreement is transferred, the franchisee is still subject to certain post-term obligations, including non-compete covenants. Specifically, after the transfer of the Franchise Agreement, the franchisee must comply with all covenants described in Section 25 of the agreement and other sections that apply after the transfer. These obligations are referred to as "Post Term Obligations."
The non-compete agreement restricts the franchisee from engaging in unfair competition after the transfer. The "Restricted Period" is two years after the transfer, and the "Restricted Territory" includes a 20-mile radius of the Territory and a 20-mile radius from all other Beverly Ann's Cookie businesses operating as of the transfer date. During this time, the franchisee is prohibited from operating or having an interest in any Competitive Business.
In practical terms, a franchisee who transfers their Beverly Anns Cookie franchise must cease operations immediately under the existing agreement and System. They cannot represent themselves as a current or former franchise owner and must stop using Beverly Anns Cookie's intellectual property. The franchisee must also settle all outstanding payments to Beverly Anns Cookie and its affiliates within 15 days. These restrictions ensure that the transferor does not unfairly compete with Beverly Anns Cookie or its other franchisees after relinquishing their franchise.