Does the Buns On Fire franchisee acknowledge that compliance with the covenants will not prevent them from earning a livelihood?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
14.1 In-Term Covenants
During the term of this Agreement, or any extension thereof, neither Franchisee, nor any partner, if the Franchisee is a partnership, nor any shareholder or member, if the Franchisee is a corporation or limited liability company, shall either directly or indirectly for himself or herself or on behalf of, or in conjunction with any other person, persons, partnership, association or corporation own, maintain, engage in, participate or have any interest in the operation of any fast-casual restaurant, food service business, or any enterprise selling Halal foods, middle-eastern cuisine, or similar food products including, but not limited to, walk-in or carry-out formats, food carts or vending machines (a "Competitive Business"), provided, however, that this prohibition shall not apply to the ownership by the Franchisee of additional Buns on Fire restaurants.
14.2 Post-Term Covenants
For a period of two (2) years following termination, expiration, or non-renewal of this Agreement,
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
Based on the 2025 Buns On Fire Franchise Disclosure Document excerpts, there is no explicit statement where the franchisee acknowledges that compliance with the covenants, specifically the non-compete agreements, will not prevent them from earning a livelihood.
However, the FDD does outline in-term and post-term covenants not to compete. During the term of the agreement, franchisees (and their partners/shareholders if applicable) are prohibited from owning, maintaining, or participating in any competitive fast-casual restaurant, food service business, or enterprise selling similar food products, with the exception of owning additional Buns on Fire restaurants. After the agreement terminates, this restriction extends for two years within specific territories, unless the termination was due to the fault or action of the franchisor.
Because the FDD excerpts do not contain an explicit acknowledgement regarding the franchisee's ability to earn a livelihood while adhering to these covenants, prospective franchisees should directly address this concern with Buns On Fire. They should seek clarification on how the franchisor ensures that these restrictions do not unduly limit the franchisee's ability to support themselves and their families, especially in the event of termination or non-renewal of the franchise agreement. It would be prudent to understand what options or support Buns On Fire offers to mitigate potential financial hardship caused by these covenants.