What is the duration of the non-compete period following the termination of a Burros Fries franchise?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee agrees that, except as otherwise approved in writing by us, Franchisee shall not, during the term of this Agreement and for a period of two (2) years from the date of (i) a transfer permitted under this Agreement; (ii) the expiration or termination of this Agreement (regardless of the cause for termination); or (iii) a final order of a duly authorized arbitrator, panel of arbitrators, or a court of competent jurisdiction (after all appeals have been taken) with respect to any of the foregoing or with respect to the enforcement of this Section 19.C, either directly or indirectly for itself, or through, on behalf of, or in conjunction with, any person, persons, or legal entity, own, maintain, operate, engage in, be employed by, or have any interest in any business using any aspect of the System, the overall Burros & Fries business concept, with similar Products and/or Services within a ten (10) mile radius of the Accepted Location designated hereunder, or within a ten (10) mile radius of any other System franchise or company-owned business in existence or planned as of the time of termination or expiration of this Agreement as identified in the Franchise Disclosure Document in effect as of the date of expiration or termination of this Agreement.
The unenforceability of all or part of this covenant not to compete in any jurisdiction will not affect the enforceability of this covenant not to compete in any other jurisdictions, or the enforceability of the remainder of this Agreement. This covenant not to compete is given in part in specific consideration for access to trade secrets provided as a part of our training or ongoing support programs. In any jurisdiction in which the covenant contained in this Section 19 or any part of it is deemed not enforceable in whole or in part, Franchisee hereby grants us an option to purchase Franchisee's Business on expiration or termination of this Agreement. In such case, we may exercise this option by giving thirty (30) days' written
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, a franchisee is subject to a non-compete agreement for two years after the termination or expiration of the franchise agreement. This restriction prevents the franchisee from engaging in a similar business within a 10-mile radius of their former Burros Fries location or any other existing or planned Burros Fries franchise.
The non-compete clause is triggered by a transfer of the franchise, the expiration or termination of the agreement (regardless of the reason), or a final order from an arbitrator or court regarding the agreement's enforcement. This means that even if the franchise is terminated due to a dispute, the franchisee is still bound by the non-compete terms.
The enforceability of the non-compete agreement is considered on a jurisdiction-by-jurisdiction basis, meaning that if it's unenforceable in one area, it doesn't invalidate the agreement in other areas. In locations where the non-compete is deemed unenforceable, Burros Fries has the option to purchase the franchisee's business upon termination or expiration of the agreement, providing 30 days' written notice to exercise this option. This clause highlights the importance Burros Fries places on protecting its business model and market presence.