During the term of the Buff City Soap agreement, what is the geographic scope of the non-compete restriction?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
During the Term, these restriction applies to any Competitive Business located within the United States. Following the expiration of the Term, termination of this Agreement, or an approved Transfer of this Agreement and with respect to a Principal, following the date the Principal ceases to be a Principal under this Agreement, this restriction will apply to any Competitive Business located: (A) within the Designated Area; (B) at or within five miles of the Makery; or (C) within five miles of any Buff City Soap makery then operating or under construction in the United States or outside the United States, except as otherwise approved in writing by Franchisor.
If any part of these restrictions is found to be unreasonable in time or distance, each month of time or mile of distance may be deemed a separate unit so that the time or distance may be reduced by appropriate order of the court to that deemed reasonable. If, at any time during the two-year period following the expiration, termination, or approved Transfer of this Agreement or the date any Principal ceases to be a Principal under this Agreement, Franchisee or any of its Principals fails to comply with its obligations under this Section 19(a), that period of non-compliance will not be credited toward satisfaction of the two-year period.
Source: Item 23 — Receipts (FDD pages 69–186)
What This Means (2025 FDD)
According to Buff City Soap's 2025 Franchise Disclosure Document, during the term of the agreement, the non-compete restriction applies to any Competitive Business located within the United States. This means that while operating a Buff City Soap franchise, a franchisee cannot own, operate, or be involved with any competing business anywhere in the United States (excluding the franchisee's existing brands). This restriction prevents franchisees from directly competing with the Buff City Soap brand during the active franchise agreement.
Following the expiration or termination of the agreement, or an approved transfer, the geographic scope of the non-compete changes. At that point, the restriction applies to any Competitive Business located (A) within the Designated Area; (B) at or within five miles of the Makery; or (C) within five miles of any Buff City Soap makery then operating or under construction in the United States or outside the United States, except as otherwise approved in writing by Franchisor. This post-term restriction is more localized, focusing on the immediate vicinity of the former franchise location and other Buff City Soap locations.
It is important to note that these restrictions are subject to reasonableness. If any part of the non-compete is found to be unreasonable in time or distance, a court may reduce the scope to what is deemed reasonable. Additionally, any period of non-compliance with the non-compete obligations will not count towards satisfying the two-year restriction period. This ensures that franchisees adhere to the non-compete terms to protect Buff City Soap's interests and market position.