Within what distance of another Crown Gold Exchange business is competition restricted after termination?

According to Crown Gold Exchange's 2024 Franchise Disclosure Document, a franchisee is restricted from competing within a specific distance of their former territory or other Crown Gold Exchange locations after the franchise agreement terminates. Specifically, for two years after the agreement expires or is terminated, the franchisee cannot have any ownership interest in, lend money or provide financial assistance to, provide services to, or be employed by any competitor within five miles of the franchisee's territory. This restriction also applies to the territory of any other Crown Gold Exchange business operating on the date of termination.

This non-compete clause is designed to protect Crown Gold Exchange's business interests by preventing former franchisees from using their knowledge and experience gained while operating a Crown Gold Exchange business to directly compete with the brand shortly after leaving the system. The restriction applies regardless of the reason for termination, whether it's due to the agreement expiring or being terminated for cause.

If the franchise agreement is terminated before a specific territory is determined, the area of non-competition will be the Development Area and the territory of any other Crown Gold Exchange business operating on the date of termination. This ensures that even if the franchisee's territory is not yet fully defined, they are still restricted from competing in the broader area they were initially intended to develop. This clause aims to prevent franchisees from exploiting the Crown Gold Exchange system and then immediately opening a competing business nearby, potentially drawing customers away from existing Crown Gold Exchange locations.

It is important to note that these covenants are independent, and if any portion is deemed unenforceable, the parties intend for a court or arbitrator to modify the restriction to protect Crown Gold Exchange's legitimate business interests. Furthermore, any non-compliance with these obligations during the restrictive period will extend the period by an additional day for each day of non-compliance, reinforcing the importance of adhering to the terms of the non-compete agreement.