After the Byrider franchise agreement terminates, for how long is the franchisee restricted from engaging in a Competitive Business?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
nt to a franchise agreement with the Company) which: (i) offers leasing or sells used automobiles, while retaining the retail installment contract or lease, (ii) operates itself as a provider of buy here pay here or lease financing whereby the selling dealer who originates retail installment contracts or leases and the assignee of the retail installment contracts or leases have some common equity ownership; (iii) provides vehicle repair services; or (iv) grants franchises or licenses to operate a business covered by the terms of (i), (ii) or (iii) of this subsection.
- 18.2 After Termination. With the exception of activities usual and customary to the winding-up or transfer of a business (e.g. collection of receivables, transitional assistance to a transferee, etc.) not to exceed 90 days, which activities Company hereby affirms that Franchisee shall have the right in which to engage, Franchisee agrees that for a period of one (1) year immediately following the expiration or termination of this Agreement or any Successor Franchise Agreement, neither it nor any of its owners (or their immediate family members) will (i) engage, participate or assist in any way in the operation of or (ii) have any direct or indirect interest (whether as an owner, investor, partner, director, officer, employee, consultant, representative, agent, landlord, or otherwise) in, any Competitive Business that is located within a twenty-five (25) mile radius of Franchisee's Business or within a ten (10) mile radius of any Business in operation or under construction as of the date of expiration or termination of this Agreement. The one (1) year post-Term noncompete period in this Article 18.2 shall begin on the date Franchisee complies with Article 18.2.
- 18.3 Covenants by Franchisee's Personnel. The Company shall have the right to require the Designated Manager and all other personnel performing managerial or supervisory
functions and all personnel receiving special training from the Company to execute confidentiality covenants in a form satisfactory to the Company.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, after the franchise agreement terminates, franchisees are restricted from engaging in a Competitive Business for one year. Specifically, for a period of one year immediately following the expiration or termination of the Franchise Agreement, the franchisee and their owners (or their immediate family members) cannot engage, participate, or assist in any way in the operation of, or have any direct or indirect interest in, any Competitive Business. This restriction applies within a 25-mile radius of the franchisee's Byrider Business or within a 10-mile radius of any Byrider Business in operation or under construction as of the date of expiration or termination. This one-year post-term noncompete period begins on the date the franchisee complies with Article 18.2 of the agreement.
However, Byrider allows for a 90-day period for activities usual and customary to winding up or transferring the business, such as collecting receivables and providing transitional assistance to a transferee. During this 90-day period, the non-compete restrictions do not apply, allowing the franchisee to manage the closure or transfer of the business.
It's important to note that Byrider has the right to seek an injunction to prohibit any conduct by the franchisee that violates the terms of the covenants not to compete. The franchisee acknowledges that violating these covenants would result in immediate and irreparable injury to Byrider, and the franchisee agrees not to contest any application by Byrider for such an injunction. The franchisee also expressly agrees that it may be presumed that a violation of the terms of said covenants not to compete was accomplished through the franchisee's unlawful utilization of Byrider's Confidential Information, know-how, methods, and procedures.