After termination or expiration, for how long is a former Desi District franchisee restricted from competing?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in franchise or other agreement | Summary |
|---|---|---|
| r. Non-competition covenants after the franchise is terminated or expires | FA: § 13.2 MUDA: none | For two years, neither you, any owner of the business, or any spouse of an owner may have ownership interest in, lend money or provide financial assistance to, provide services to, or be employed by a competitor located within five miles of your former territory or the territory of any other Desi District business operating on the date of termination. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 44–48)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, a franchisee is subject to a non-competition covenant for two years after the franchise is terminated or expires. This restriction applies to the franchisee, any owner of the business, or any spouse of an owner.
During this two-year period, these individuals are prohibited from having any ownership interest in, lending money or providing financial assistance to, providing services to, or being employed by a competitor. This non-compete clause is limited geographically to within five miles of the former Desi District territory or the territory of any other Desi District business operating on the date of termination.
This means that a former Desi District franchisee cannot simply open a competing business nearby or join an existing competitor in the immediate area. The restriction aims to protect Desi District's market share and confidential business information. Franchisees should carefully consider these limitations before investing, as they will impact their ability to work in the same industry after leaving the Desi District system.