For how long after termination or expiration of the Coffee News franchise agreement is a franchisee prohibited from being involved 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 restricted from involvement in a competing business for a period of two years following the termination or expiration of the franchise agreement. This restriction applies within the franchisee's state.
This non-compete clause means that after a Coffee News franchise ends, the former franchisee cannot operate or be involved with a similar business within the same state for two years. This is designed to protect Coffee News's market share and proprietary information. Such clauses are common in franchising to prevent franchisees from using the franchisor's business model and customer base to start a competing venture immediately after leaving the system.
Prospective franchisees should carefully consider the implications of this restriction. It could limit their business options if they decide to leave the Coffee News system. It is important to fully understand the scope of what constitutes a "competing business" as defined in the franchise agreement to avoid unintentional breaches of the non-compete clause. Franchisees should seek legal counsel to fully understand the implications of this clause before signing the agreement.