What section of the Big Apple Bagels Area Development Agreement discusses the 'Covenant Not to Compete'?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
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 the 2025 Big Apple Bagels FDD, Paragraph 17.d. of the Franchise Agreement outlines the 'Covenant Not to Compete'. This clause specifies that upon termination or expiration of the agreement, the franchisee and their owners are restricted from engaging in any competitive business activities.
The restrictions apply for a period of two years, beginning from the termination or expiration date, or the date when compliance with the paragraph begins, whichever is later. During this period, franchisees and their owners are prohibited from having any direct or indirect ownership interest in a Competitive Business within ten miles of the Big Apple Bagels store, any other Big Apple Bagels franchise, or any company-owned or affiliate-owned Big Apple Bagels or My Favorite Muffin store.
Furthermore, franchisees are barred from acting as a director, officer, manager, employee, consultant, or in any other service capacity for a Competitive Business within the specified radius. They are also prohibited from owning, engaging in, being employed by, advising, assisting, leasing to, investing in, franchising, lending money to, or having any financial interest in a Competitive Business within the restricted area. The FDD defines a 'Competitive Business' as the sale of bagels, cream cheese, muffins, sandwiches, and/or coffee through retail or wholesale channels.