After the Burros Fries franchise is terminated or expires, what are the non-competition covenants for the franchisee?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Franchise Agreement | Summary |
|---|---|---|
| r. Non-competition covenants | FA – Section 19.C | FA – No interest in competing business for |
| after the franchise is terminated | two years within ten miles of any company | |
| or expires. | owned outlet or other franchises. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 46–49)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, after the franchise is terminated or expires, the franchisee is subject to certain non-competition covenants. Specifically, the franchisee cannot have any interest in a competing business for two years. This restriction applies within a ten-mile radius of any company-owned outlet or other Burros Fries franchises.
This non-compete agreement means that a former Burros Fries franchisee is restricted from engaging in any competitive business within the specified geographic area and timeframe. This prevents the franchisee from using the knowledge and experience gained while operating the Burros Fries franchise to directly compete with the brand shortly after the franchise agreement ends.
Such post-term non-compete clauses are common in franchising to protect the brand's market share and customer base. Prospective franchisees should carefully consider the implications of this restriction, especially if they plan to remain in the same geographic area after the franchise agreement concludes. It is important to understand the scope and enforceability of these covenants under applicable state laws, as they can significantly impact future business opportunities.