What constitutes a 'Competitive Business' in relation to the non-solicitation covenant for Burneys Sweets More?

According to Burneys Sweets More's 2025 Franchise Disclosure Document, a 'Competitive Business' is defined in the context of covenants against unfair competition and solicitation. Specifically, it refers to any business or commercial activity, excluding a Burneys Sweets More franchise that the franchisee is authorized to operate, that meets certain revenue criteria related to bakery item sales. This definition is crucial for understanding the scope of restrictions placed on franchisees both during and after the franchise term.

During the term of the franchise agreement, a franchisee is restricted from owning, managing, or being involved with a business that derives 25% or more of its gross sales from bakery items such as cakes, croissants, and pies, whether sold for dine-in or carry-out. The definition also includes any business that sells any amount of glazed and deep-fried croissants. This means a Burneys Sweets More franchisee cannot operate or be significantly involved in a competing bakery or similar establishment without prior written consent from Burneys Sweets More.

Post-termination, these restrictions continue, preventing a former franchisee from engaging in a Competitive Business within a defined Restrictive Territory. The Restrictive Territory includes the location of the former franchised business, the territory it served, areas where Burneys Sweets More or its affiliates operate, territories of other Burneys Sweets More franchisees, and an area within a 10-mile radius of these locations. This broad definition and the associated restrictions are designed to protect Burneys Sweets More's market share, trade secrets, and customer relationships.