Does the Chop5 Salad Kitchen franchise agreement specify any exceptions to the non-competition covenant?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
| PROVISION | SECTIONS IN AGREEMENT | SUMMARY |
|---|---|---|
| r. Non-competition | FA: 14.3 & 21.1 | No involvement for 1 year in competing business from your |
| covenants after | Restaurant's premises or anywhere within: (a) 10 miles of your | |
| the franchise is | Restaurant; or (b) 10 miles of any other Restaurant located in a state in | |
| terminated or | which you operate (or operated) a Restaurant. | |
| expires | ADA: Not Applicable | The ADA does not impose any noncompetition covenants. |
| s. Modification of the agreement | FA: 24.3 & 24.8 ADA: 12.6 | Requires writing signed by both parties (except we may unilaterally change Manual or reduce scope of restrictive covenants). Other modifications to comply with state laws. Requires writing signed by both parties. Other modifications to comply with state laws. |
| q. Non-competition | FA: 14.3 | |
| covenants during | ||
| the term of the | ADA: Not Applicable | The ADA does not impose any noncompetition covenants. |
| franchise |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 41–45)
What This Means (2024 FDD)
According to the 2024 Chop5 Salad Kitchen Franchise Disclosure Document, the franchise agreement outlines specific terms regarding non-competition covenants both during and after the franchise term, with some exceptions. During the term of the franchise agreement, franchisees are restricted from involvement in any competing business. However, the Area Development Agreement (ADA) does not impose any noncompetition covenants.
After the franchise is terminated or expires, the franchisee is prohibited from any involvement in a competing restaurant business for one year. This restriction applies to the physical premises of the former Chop5 Salad Kitchen restaurant, as well as anywhere within a 10-mile radius of the former restaurant or any other Chop5 Salad Kitchen restaurant located in a state where the franchisee operates (or operated) a restaurant.
Chop5 Salad Kitchen retains the right to unilaterally reduce the scope of these restrictive covenants. Additionally, modifications to comply with state laws are permitted, indicating that the enforcement and specific terms of the non-competition agreements may vary based on local regulations. Any modifications to the agreement must be in writing and signed by both parties, unless Chop5 Salad Kitchen is reducing the scope of the restrictive covenants.