Does the non-competition agreement apply if the Coffee News franchise is assigned?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
During the term of this Agreement and for a period of two (2) Years after the termination, expiration, transfer, or assignment of this Agreement, Franchisee, either as individuals or a business entity, their family members or the officers, directors, other key personnel, employees or stockholders, as the case may be, shall not directly or indirectly, through corporations, partnerships, trusts, associations, joint ventures, or unincorporated businesses, perform any services for, engage in or acquire, be an employee of, have any financial, beneficial, or equitable interest in, or have any interest whatsoever in any publication of a type similar to the Periodical that operates within the region covered by this agreement .
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
According to the 2025 Coffee News Franchise Disclosure Document, the non-competition agreement extends to situations involving the transfer or assignment of the franchise. Specifically, the agreement states that the franchisee is restricted from engaging in similar publications not only during the term of the agreement but also for two years following the termination, expiration, transfer, or assignment of the agreement. This restriction applies to the franchisee, their family members, or related business entities and individuals associated with the franchisee.
This means that if a Coffee News franchisee sells or transfers their franchise to another party, the original franchisee is still bound by the non-compete clause for the specified period. This provision is designed to protect Coffee News from competition by former franchisees who might use their knowledge and experience to start a similar publication in the same region. The non-compete agreement also requires franchisees to ensure their employees, officers, and key personnel are bound by similar non-competition terms.
It's important for prospective Coffee News franchisees to understand the implications of this non-compete agreement. They should carefully consider the geographic scope and duration of the restriction, as it could limit their future business opportunities. Additionally, franchisees should ensure that any potential buyers of their franchise are aware of the non-compete obligations that will continue to apply to the seller after the transfer.