What is the geographic scope of the post-term non-compete for a Cicis franchisee if there is a protected area?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) interfere with our relationships with any supplier to Cicis Restaurants or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System; and
- (2) for a continuous uninterrupted period commencing upon the expiration or termination of, or a Transfer (defined below) described in, this Agreement and continuing for two (2) years thereafter, except as we otherwise approve in writing, neither you nor any of your Owners and Operator (and members of their immediate family) will, directly or indirectly, for yourselves, or through, on behalf of, or in conjunction with any other Person, by direct inducement or otherwise, engage in any activities described in Section 9.C(1) above in respect of any Competing Business:
- (a) at the Location; or
- (b) within the Protected Area; or
- (c) if this Agreement is executed pursuant to a development agreement, within the development area described therein; or
- (d) within a 10-mile radius of (i) the Location, (ii) the Protected Area, (iii) the development area, if applicable, or (iv) any Cicis Restaurant or other Cicis-branded food service facility in existence or under construction as of the date of this Agreement or at the commencement of the obligation described in this Section 9.C(2).
If any person restricted by this Section 9C(2) fails to comply with the foregoing obligations as of the date of expiration, termination, or Transfer, the 2-year restricted period for that person will commence on the date the person begins to comply 9C(2), which may be the date a court order is entered enforcing this provision.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the post-term non-compete agreement restricts a franchisee from engaging in activities related to a Competing Business for two years after the franchise agreement expires, terminates, or undergoes a transfer. This restriction applies to the franchisee, their owners, operators, and immediate family members.
The geographic scope of this non-compete includes several areas. First, it applies to the physical location of the Cicis restaurant. Second, it extends to the Protected Area that is defined in the Franchise Agreement. Third, if the agreement was executed under a development agreement, the non-compete applies within the development area. Finally, the non-compete covers a 10-mile radius of the restaurant's location, the Protected Area, the development area (if applicable), and any existing or under-construction Cicis restaurant or branded food service facility.
It is important to note that the two-year restricted period begins when the person starts complying with the non-compete obligations, which may be the date a court order is issued to enforce the provision. This means that if a franchisee violates the non-compete agreement immediately after the termination of the franchise, the two-year clock does not start until they cease the violating activity. This could potentially extend the period during which they are restricted from engaging in a competing business.