What is the geographic scope of the covenant not to compete for a Big Apple Bagels franchisee after termination or expiration?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
n of the Franchise, he will immediately cease to use any Proprietary Information of Franchisor disclosed to or otherwise learned or acquired by Franchisee in any business or otherwise and return to Franchisor all copies of the BAGELS Operations Manual and any other confidential materials which have been loaned or made available to him by Franchisor.
d. Covenant Not to Compete. Upon termination of this Agreement by Franchisor in accordance with its terms and conditions or by Franchisee without cause, or upon expiration of this Agreement, Franchisee and its owners agree that for a period of two (2) years, commencing on the effective date of termination or expiration or the date on which all persons restricted by this Paragraph begin to comply with this Paragraph, whichever is later, neither Franchisee nor its owners shall (i) have any direct or indirect ownership interest in any Competitive Business located or operating at the BAGELS Store location or within ten (10) miles of the BAGELS Store or within ten (10) miles of any other franchisee of Franchisor, or of any company-owned or Affiliate-owned BAGELS Store or My Favorite Muffin Store; (ii) have any direct or indirect ownership interest in any entity which has granted or during such two (2) year period grants franchises or licenses for the location or operation of Competitive Businesses at the BAGELS Store location or within ten (10) miles of the BAGELS Store or within ten (10) miles of any other franchisee of Franchisor, or of any company-owned or Affiliate-owned BAGELS Store or My Favorite Muffin Store; (iii) perform services as a director, officer, manager, employee, consultant, representative, agent, lender, lessor, or otherwise for any Competitive Business located or operating at the BAGELS Store location or within ten (10) miles of the BAGELS Store or within ten (10) miles of any other franchisee of Franchisor, or of any company-owned or Affiliate-owned BAGELS Store or My Favorite Muffin Store, or (iv) directly or indirectly, for Franchisee or for any other person or entity, alone or through or on behalf of others, own, engage in, be employed by, advise, assist, lease or sublease to, invest in, franchise, lend money to, sell or lease the assets of the BAGELS Store to, or have any financial or other interest in, a Competitive Business at the BAGELS Store location or within ten (10) miles of the BAGELS Store or ten (10) miles of any other franchisee of Franchisor, or of any company-owned or Affiliate-owned BAGELS Stores or My Favorite Muffin Store.
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, the covenant not to compete restricts a franchisee and their owners after the termination or expiration of the franchise agreement. This restriction applies for two years, beginning on the termination or expiration date, or the date when compliance with the covenant begins, whichever is later.
The geographic scope of this covenant prevents the franchisee and their owners from having any direct or indirect ownership interest in a Competitive Business. This includes businesses located or operating at the Big Apple Bagels store location, within ten miles of that store, or within ten miles of any other Big Apple Bagels or My Favorite Muffin store, whether franchised, company-owned, or affiliate-owned.
Furthermore, the franchisee and their owners are prohibited from having ownership in any entity that grants franchises or licenses for Competitive Businesses within the same geographic areas. They are also barred from performing services as a director, officer, manager, employee, consultant, or in any other capacity for a Competitive Business within these areas. The term "Competitive Business" is defined as the sale of bagels, cream cheese, muffins, sandwiches, and/or coffee through retail or wholesale channels.