What is considered a 'Competitive Business' in the context of the Big Apple Bagels covenant not to compete?

According to Big Apple Bagels' 2025 Franchise Disclosure Document, a "Competitive Business" is defined specifically for the purposes of the non-compete clause. This definition is crucial for franchisees to understand, as it dictates what types of businesses they cannot be involved with during the term of their franchise agreement and for a period after the agreement terminates.

Specifically, a Competitive Business includes any business involved in the sale of bagels, cream cheese, muffins, sandwiches, and/or coffee. This definition extends to any other items or products that a Big Apple Bagels franchisee is authorized to sell at any point after the franchise agreement is signed. The restriction applies whether these products are sold through retail or wholesale channels of distribution, covering a broad range of potential competitive activities.

This definition has significant implications for a franchisee. During the term of the agreement, the franchisee is restricted from having any ownership or operational involvement with such a business anywhere in the world. After the agreement ends, the restrictions are limited to a specific geographic area. It is also important to note that the restrictions do not apply to ownership of a small percentage (3% or less) of shares in publicly traded companies. Franchisees should seek legal counsel to fully understand the scope and enforceability of these restrictions in their specific jurisdiction.