For how long after the termination, cancellation, or expiration of the Bhc Master Franchise Agreement is the Master Franchisee restricted from operating a competing 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, 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.
11.3 General Provisions Regarding Non-Competition Covenants.
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 operating a competing business for a period of two years after the termination, cancellation, or expiration of the Master Franchise Agreement. This restriction applies to both the Master Franchisee and any Principal Equity Operator.
During this two-year period, the Master Franchisee and Principal Equity Operators are prohibited from directly or indirectly 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 Master Franchisee's Territory or any other authorized retail location selling Bhc Products. However, the franchisor may provide express prior written consent to waive this restriction, which may be withheld at the Franchisor's discretion.
This non-compete clause ensures that former Bhc Master Franchisees do not leverage their knowledge and experience gained during their franchise term to directly compete with the Bhc system. It protects Bhc's market share and proprietary information. The agreement also states that if any applicable law or regulation limits the franchisor's rights under the non-compete section, then the section will be amended or deleted to conform to the requirements of such laws and regulations.