What is the maximum duration of a non-compete covenant that Brueggers Bagels can require of a franchisee in Indiana after termination or failure to renew?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
- (9) Requiring a franchisee to covenant not to compete with the franchisor for a period longer than three (3) years or in an area greater than the exclusive area granted by the franchise agreement or, in absence of such a provision in the agreement, an area of reasonable size, upon termination of or failure to renew the franchise.
- (12) If the Agreement contains a provision that is inconsistent with the Indiana Code, the provisions of the Indiana Code will supersede the Agreement.
Source: Item 23 — RECEIPTS (FDD pages 61–335)
What This Means (2025 FDD)
According to Brueggers Bagels' 2025 Franchise Disclosure Document, Indiana law places certain restrictions on non-compete agreements within franchise contracts. Specifically, Brueggers Bagels cannot enforce a non-compete covenant against a franchisee for more than three years following the termination or non-renewal of the franchise agreement.
Furthermore, the enforceable area of the non-compete is limited. It cannot exceed the exclusive territory granted to the franchisee under the franchise agreement. If the agreement does not specify an exclusive territory, the non-compete area must be of a reasonable size. This means that Brueggers Bagels cannot prevent a former franchisee from operating a competing business outside of their original, defined territory or a reasonable area if no territory was initially defined.
This protection is provided under Indiana Code, and the FDD stipulates that if any part of the Brueggers Bagels franchise agreement conflicts with Indiana law, the state law will take precedence. Therefore, a Brueggers Bagels franchisee in Indiana can be assured that the non-compete restrictions will not exceed the limits defined by Indiana law, regardless of what the standard franchise agreement might state.