After the Chocolate Bash agreement expires, what is the geographic limit of the non-compete restriction for Restricted Parties?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
- (b) Restriction Post Term. For two years after this Agreement expires or is terminated for any reason (or, if applicable, for two years after a Transfer), no Restricted Party shall directly or indirectly have any ownership interest in, or be engaged or employed by, any Competitor within five miles of Franchisee's Territory or the territory of any other Chocolate Bash business operating on the date of termination or transfer, as applicable.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to the 2024 Chocolate Bash Franchise Disclosure Document, after the franchise agreement expires or is terminated, Restricted Parties are subject to a non-compete restriction. This restriction lasts for two years. During this period, Restricted Parties cannot have any ownership interest in, or be employed by, any competitor.
The geographic scope of this restriction extends to within five miles of the franchisee's territory. It also includes the territory of any other Chocolate Bash business operating on the date of termination or transfer.
It is important to note that California law may affect the enforceability of this non-compete clause. The FDD states that such covenants extending beyond the agreement's term may not be enforceable under California Law. Franchisees should seek legal counsel to understand the specific implications in their state.