After the Coffee News franchise is terminated or expires, for how long is the franchisee restricted from involvement in a competing business, and where?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
|---|---|---|
| q. Non-competition covenants during the term of the franchise. | Section 8.5, Exhibit A | No involvement in competing business in your state. |
| r. Non-competition covenants after the franchise is terminated or expires. | Section 8.5, Exhibit A | No involvement in competing business in your state for 2 years following termination. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 25–27)
What This Means (2025 FDD)
According to Coffee News's 2025 Franchise Disclosure Document, a franchisee is subject to a non-competition covenant after the franchise is terminated or expires. Specifically, the franchisee is restricted from involvement in a competing business in their state for a period of two years following the termination or expiration of the franchise agreement. This restriction is detailed in Section 8.5 and Exhibit A of the franchise agreement.
This non-compete clause means that a former Coffee News franchisee cannot operate or be involved with a similar business that competes with Coffee News within the same state for two years after their franchise agreement ends. This is a fairly standard practice in franchising to protect the brand and business model of Coffee News. The restriction aims to prevent a former franchisee from using the knowledge and experience gained while operating a Coffee News franchise to directly compete against the franchisor.
For a prospective franchisee, this means carefully considering the implications of this restriction. If they plan to remain in the same state after the franchise agreement ends, they will need to avoid any business ventures that could be considered competitive with Coffee News for two years. It is important to fully understand what constitutes a "competing business" under the terms of the franchise agreement to ensure compliance and avoid potential legal issues. Franchisees should seek legal counsel to fully understand the scope and enforceability of the non-compete agreement in their specific state.