What is the geographic radius of the non-competition covenant for a Browns Chicken franchise transfer?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
If the Franchise expires, is not renewed or is terminated prior to its expiration for any reason, Franchisee agrees that for a period of eighteen (18) months commencing on the effective
date of expiration or termination of the Franchise, or the date on which Franchisee ceases to conduct the business conducted pursuant to this Agreement, whichever is later, it will not:
- (1) engage, directly or indirectly, as an owner (except of publicly-traded securities), partner, director, officer, employee, consultant, lessor, lender, representative or agent, or in any other capacity in a retail food service business featuring cooked chicken, pasta, or sandwiches, and which is located within five (5) miles of the Store or any BROWN's Store, or in any entity which is granting franchises or licenses for retail food service businesses featuring cooked chicken, pasta or sandwiches; or
- (2) lease, let or sublease any real property or personal property to any person, corporation, partnership or any other entity engaged directly or indirectly in any retail food service business featuring cooked chicken, pasta or sandwiches located within five (5) miles of the Store or any BROWN's Store.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
The 2025 Browns Chicken Franchise Disclosure Document does not specify a non-competition radius related to franchise transfers. However, it does state that if a Browns Chicken franchise expires, is not renewed, or is terminated, the franchisee is restricted from engaging in a similar retail food service business featuring cooked chicken, pasta, or sandwiches within five miles of the original Browns Chicken store or any other Browns Chicken store. This restriction lasts for 18 months, starting from the date of expiration or termination of the franchise, or the date the franchisee stops conducting business, whichever is later.
This non-compete clause prevents former franchisees from leveraging Browns Chicken's confidential information and business model to compete against the franchise system shortly after their departure. It also restricts them from leasing property to competitors within that same radius.
Since the FDD does not provide details on non-compete clauses related to franchise transfers, prospective franchisees should directly ask Browns Chicken about any non-compete obligations that may arise when transferring a franchise to a new owner. This will help clarify the obligations of the selling franchisee.