If a Browns Chicken franchisee's agreement is terminated, from what date does the non-compete period begin?
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.
To the extent that this Paragraph E of Section 21 is deemed unenforceable by virtue of its scope in terms of area or length of time or activity restrained, but may be made enforceable by reduction of any or all thereof, Franchisee and Brown agree that the same shall be enforced to the fullest extent permissible under the laws and public policies applied in the jurisdiction in which enforcement is sought.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, if a franchise agreement expires, is not renewed, or is terminated early for any reason, the franchisee is subject to a non-compete agreement. This agreement lasts for 18 months.
The 18-month non-compete period starts on either the effective date of the expiration or termination of the franchise agreement, or the date the franchisee stops operating the Browns Chicken business, whichever date is later. This means that Browns Chicken aims to prevent former franchisees from immediately opening a competing business using the knowledge and experience gained from operating a Browns Chicken franchise.
During this 18-month period, the franchisee is restricted from engaging in any retail food service business featuring cooked chicken, pasta, or sandwiches within a five-mile radius of their former Browns Chicken store or any other Browns Chicken location. This restriction applies whether the franchisee acts as an owner, partner, director, officer, employee, consultant, lessor, lender, representative, or agent. Additionally, the franchisee cannot lease property to anyone operating a similar food service business within that five-mile radius.
This non-compete clause is designed to protect Browns Chicken's market share and brand integrity. However, the document also states that if any part of the non-compete agreement is deemed unenforceable due to its scope, area, or length of time, it should be enforced to the fullest extent permissible by law. This ensures that Browns Chicken can maintain some level of protection against competition from former franchisees, even if the original terms are modified by a court.