During what period is a Chop5 Salad Kitchen franchisee prohibited from engaging in 'Prohibited Activities'?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
or less in a publicly traded company that is a Competing Business; (b) disparaging or otherwise making negative comments about us, our affiliate, the System and/or any Restaurant; (c) diverting or attempting to divert any business from us, our affiliate or another franchisee; and/or (d) inducing any Person to transfer their business from a Restaurant to a competitor.
"Restaurant" means a fast-casual restaurant featuring made-to-order salads, bowls, soups and other healthy food options under th
Source: Item 23 — RECEIPT (FDD pages 50–178)
What This Means (2024 FDD)
According to the 2024 Chop5 Salad Kitchen FDD, the period during which a franchisee is restricted from engaging in 'Prohibited Activities' is defined as the 'Restricted Period'. This period lasts for one year after certain events occur.
The 'Restricted Period' begins after the earliest of these events: (a) the termination or expiration of the Franchise Agreement; (b) the date the franchisee assigns the Franchise Agreement to another person in whom neither the franchisee nor their spouse holds any direct or indirect ownership interest; or (c) the date on which neither the franchisee nor their spouse holds any direct or indirect ownership interest in the Franchisee entity or the Restaurant that it operates.
In practical terms, this means that for one year following the end of the franchise agreement, or the transfer of ownership out of the franchisee's hands, the franchisee is subject to certain restrictions on their activities. These 'Prohibited Activities' include owning or operating a competing business, making negative comments about Chop5 Salad Kitchen, diverting business away from Chop5, or inducing people to transfer their business away from Chop5 Salad Kitchen.