Does the FDD specify any geographic limitations on the non-competition covenant for Cilantro Taco Grill?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
- b. In further consideration for the disclosure to Covenantor of the Confidential Information and to protect the goodwill and unique qualities of the System, Covenantor further agrees and covenants that, upon the termination of Covenantor's employment or association with Franchisee and continuing for two (2) years thereafter, Covenantor shall not, for Covenantor or through, on behalf of or in conjunction with any person or entity:
- (i) divert, or attempt to divert, any business or customer of the Franchised Business or of other franchisees in the Cilantro Taco Grill System to any competitor, by direct or indirect inducement or otherwise, or
- (ii) participate as an owner, partner, director, officer, employee, or consultant or serve in any other managerial, operational or supervisory capacity in any restaurant or food service business featuring Mexican cuisne within twenty (20) miles of Franchisee's restaurant or any Cilantro Taco Grill location.
Source: Item 23 — RECEIPT (FDD pages 52–208)
What This Means (2024 FDD)
According to the 2024 Cilantro Taco Grill FDD, there are geographic limitations specified in the non-competition covenant. During employment or association with the franchisee, an individual cannot divert business from Cilantro Taco Grill outlets or participate in any Mexican cuisine food service business.
Upon termination of employment or association with the franchisee, the non-competition covenant extends for two years. During this time, the individual is restricted from diverting business from the franchised business or other Cilantro Taco Grill franchisees. They are also prohibited from participating in a managerial, operational, or supervisory capacity in any Mexican cuisine restaurant or food service business within 20 miles of the franchisee's restaurant or any Cilantro Taco Grill location.
These restrictions are acknowledged by both parties as reasonable in terms of time, geographical area, and scope, ensuring they do not impose an undue restraint while protecting the goodwill and business interests of Cilantro Taco Grill.