What are the geographic limitations on non-competition after the Dq Treat franchise is terminated or expires for a Street location?

According to the 2025 Dq Treat Franchise Disclosure Document, if the franchise is terminated or expires, the franchisee is restricted from involvement in a Competitive Business within 500 meters of the authorized street location for one year. A Competitive Business is defined as any quick service restaurant that serves hamburgers but does not serve alcohol, or a business that generates more than 10% of its revenue from sales of ice cream, yogurt, frozen custard, fruit-based beverages, soft-serve or other frozen treats.

This non-compete clause means that a former Dq Treat franchisee operating a street location cannot open or work at a similar business within a 500-meter radius of their previous Dq Treat store for one year after the franchise agreement ends. This restriction aims to protect Dq Treat's market share and customer base by preventing former franchisees from directly competing with the brand in close proximity.

The non-compete restriction varies based on the location type. For Captive-venue locations, the restriction is more limited, preventing involvement only within the same building or venue. The street location restriction is broader, covering a 500-meter radius. This difference likely reflects the higher potential for direct competition in street locations compared to captive venues.

Prospective franchisees should carefully consider the implications of this non-compete clause, especially if they plan to remain in the food service industry after their Dq Treat franchise agreement expires or is terminated. They should evaluate potential alternative business opportunities that would not violate the non-compete agreement or consider locations outside the restricted zone.