Can a Coffee News franchisee be involved in a competing business in their state after the franchise is terminated or expires?
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 restricted from involvement in a competing business in their state for a period of two years after the franchise is terminated or expires. This restriction is outlined in Section 8.5 and Exhibit A of the franchise agreement. This non-compete clause is a standard practice in franchising to protect the brand and business model of Coffee News.
This restriction means that if a franchisee's agreement ends, whether through termination or expiration, they cannot immediately start or become involved in a similar business within the same state. This could limit the franchisee's immediate career options and business ventures following the end of their franchise agreement. The franchisee should carefully consider this restriction and its potential impact on their future plans before investing in a Coffee News franchise.
It is important for prospective franchisees to fully understand the terms of the non-compete agreement, including the definition of what constitutes a "competing business." Franchisees should also be aware of the geographic scope of the restriction, which in this case, is limited to the state in which they operated their Coffee News franchise. Franchisees should seek legal counsel to fully understand the implications of this clause and how it may affect their future business opportunities.