Following termination, cancellation, or expiration as described in section 15.1(a), what post-termination obligations regarding competition does a Bhc franchisee have?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
11.2 Post Termination Non-Competition Covenants.
(a) For a period of two years after the date ("Termination Date") this Agreement is terminated, is canceled, or expires without renewal pursuant to section 5.2 of this Agreement, Franchisee agrees that neither Franchisee nor any Principal Equity Operator will (either directly or indirectly, for itself or themselves, or through, on behalf of, or in conjunction with, any person, persons, partnership, corporation or other entity) operate, manage, own, assist or hold an interest in (direct or indirect as an employee, officer, director, shareowner, partner or otherwise), or engage in, any competing business selling goods or offering services equivalent to BHC Products or the Franchised Business, within a radius
of 25 miles of Franchisee's Territory or any other authorized retail location selling BHC Products, without Franchisor's express prior written consent, which consent may be withheld in Franchisor's sole and absolute discretion. Following termination or expiration of this Agreement, Franchisee must always refrain from any use, direct or indirect, of any Proprietary Information or Trade Secrets.
(b) If any valid, applicable law or regulation of a competent governmental authority having jurisdiction over this Agreement or the parties hereto limits Franchisor's rights under section 11.2(a) above, then the section will be deemed amended (or deleted) to conform to the requirements of such laws and regulations, but in such event (unless deleted) the provisions of the Agreement thus affected will be amended only to the extent necessary to bring it within the requirements of the law or regulation.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, if the Franchise Agreement is terminated, canceled, or expires as described in section 15.1(a), the franchisee is subject to post-termination non-competition covenants as outlined in section 11.2 of the agreement. This means that the franchisee must adhere to certain restrictions regarding involvement in competing businesses.
Specifically, for a period of two years after the termination date, neither the franchisee nor any Principal Equity Operator can directly or indirectly operate, manage, own, assist, or hold an interest in any competing business that sells goods or offers services equivalent to Bhc Products or the Franchised Business. This restriction applies within a 25-mile radius of the franchisee's territory or any other authorized retail location selling Bhc Products. However, Bhc may provide express prior written consent to waive this restriction, which Bhc can withhold at its discretion.
Additionally, following the termination or expiration of the Franchise Agreement, the franchisee must always refrain from any use, direct or indirect, of any Proprietary Information or Trade Secrets belonging to Bhc. The agreement also notes that if any applicable law or regulation limits Bhc's rights under section 11.2(a), then the section will be amended or deleted to conform to those legal requirements, but only to the extent necessary to comply with the law or regulation.