After the Bhc Franchise Agreement terminates, for how long is the franchisee restricted from engaging in a Competitive Business?
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, both the franchisee and any Principal Equity Operator are subject to a post-termination non-competition covenant for a period of two years after the termination, cancellation, or expiration of the Franchise Agreement. This restriction applies if the agreement is terminated, canceled, or expires without renewal as per section 5.2 of the agreement.
During this two-year period, the franchisee and Principal Equity Operator are prohibited from operating, managing, owning, assisting, or holding 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. Bhc's prior written consent is required to engage in such activities within this timeframe and geographic area, and Bhc may withhold this consent at its discretion.
Furthermore, following the termination or expiration of the agreement, the franchisee must refrain from using any proprietary information or trade secrets related to Bhc. However, if any applicable law or regulation limits Bhc's rights under the non-competition covenant, the section will be amended or deleted to comply with such laws, but only to the extent necessary to meet the legal requirements.