What is the duration of the non-compete period following the expiration or termination of the Chicken Guy Development Term?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Own, maintain, operate, engage in, advise, help, make loans to, or have any interest in, either directly or indirectly, any restaurant business: (i) that features chicken as a primary menu item (i.e., sales of chicken menu items comprise at least 20% of sales); or (ii) whose method of operation or trade dress is similar to that employed in the System.
During the Development Term, there is no geographical limitation on this restriction.
Following the expiration or earlier termination of the Development Term, this restriction shall apply within the Development Territory, within 2 miles of the border of the Development Territory and within 2 miles of any then-existing Chicken Guy!
Restaurant, except as otherwise approved in writing by Chicken Guy.
This restriction shall not apply to Developer's existing restaurant or foodservice operations, if any, which are identified in the attached Data Sheet, nor shall it apply to other restaurants operated by Developer that are franchised by Chicken Guy or its affiliates.
- (3) If any part of these restrictions is found to be unreasonable in time or distance, each month of time or mile of distance may be deemed a separate unit so that the time or distance may be reduced by appropriate order of the court to that deemed reasonable.
If, at any time during the 1-year period following expiration or earlier termination of this Agreement, Developer fails to comply with its obligations under this Section, that period of noncompliance will not be credited toward Developer's satisfaction of the 1-year obligation.
- **D.
Modification.** Chicken Guy shall have the right, in its sole discretion, to reduce the scope of any covenant in this Section 12 effective immediately upon Developer's receipt of written notice, and Developer agrees that it shall comply forthwith with any covenant as so modified, which shall be fully enforceable notwithstanding the provisions of Section 20.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to the 2025 Chicken Guy Franchise Disclosure Document, following the expiration or earlier termination of the Development Term, the non-compete restriction applies within the Development Territory, within 2 miles of the border of the Development Territory, and within 2 miles of any then-existing Chicken Guy Restaurant. This restriction lasts for a period of one year.
This means that after the Development Agreement ends, a former Chicken Guy developer is restricted from engaging in competitive restaurant businesses within the specified geographic areas for one year. Specifically, the developer cannot own, maintain, operate, engage in, advise, help, make loans to, or have any interest in any restaurant business that features chicken as a primary menu item (at least 20% of sales) or whose operation or trade dress is similar to the Chicken Guy system.
It is important to note that this restriction does not apply to the developer's existing restaurant or foodservice operations, if any, which are identified in the attached Data Sheet, nor does it apply to other restaurants operated by the developer that are franchised by Chicken Guy or its affiliates. If the developer fails to comply with these non-compete obligations during the 1-year period, that period of noncompliance will not be credited toward fulfilling the 1-year obligation. Chicken Guy also has the right to reduce the scope of any covenant in this section.