What is the geographic radius within which a Bhc Master Franchisee is prohibited from engaging in a competing business after termination?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
(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, Master Franchisee agrees that neither Master 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 Master 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, Master 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, a Master Franchisee is restricted from engaging in any competing business within a specific geographic radius after the termination, cancellation, or expiration of their Master Franchise Agreement. This restriction lasts for two years from the termination date.
The non-compete clause specifies that the Master Franchisee (or any Principal Equity Operator) cannot operate, manage, own, assist, or hold an interest in any business that sells goods or offers services equivalent to Bhc products or the franchised business. This prohibition extends to a 25-mile radius of the Master Franchisee's territory or any other authorized retail location selling Bhc products.
Bhc requires express prior written consent from the franchisor to engage in a competing business within the restricted area, and the franchisor may withhold this consent at their discretion. Additionally, after the agreement terminates or expires, the Master Franchisee must not use any proprietary information or trade secrets.
It's important to note that if any applicable law or regulation limits Bhc's rights under this non-compete clause, the clause will be amended or deleted to comply with those legal requirements. However, the clause will only be modified to the extent necessary to meet the requirements of the law or regulation.