What is the maximum length of a non-competition covenant that is presumed reasonable after termination of employment for Cilantro Taco Grill in Washington?
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.
- c. The parties acknowledge and agree that each of the covenants contained herein are reasonable limitations as to time, geographical area, and scope of activity to be restrained and do not impose a greater restraint than is necessary to protect the goodwill or other business interests of Franchisor.
Source: Item 23 — RECEIPT (FDD pages 52–208)
What This Means (2024 FDD)
According to the 2024 Cilantro Taco Grill Franchise Disclosure Document, after termination of employment or association with a franchisee, a covenantor is restricted from engaging in activities that compete with Cilantro Taco Grill. This non-compete period extends for two years. During this time, the covenantor cannot divert business from the franchised business or other franchisees within the Cilantro Taco Grill system.
Specifically, the covenantor is prohibited from participating as an owner, partner, director, officer, employee, or consultant in any restaurant or food service business featuring Mexican cuisine. This restriction applies within a 20-mile radius of the franchisee's restaurant or any Cilantro Taco Grill location.
This non-compete agreement is designed to protect the goodwill and unique qualities of the Cilantro Taco Grill system. The agreement acknowledges that the limitations on time, geographical area, and scope of activity are reasonable and do not impose a greater restraint than necessary to protect the franchisor's business interests.