What is the geographic scope of the post-term noncompete restriction for a Dq Treat restaurant located in a Street Location?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.6 Post-Term Noncompete. Licensee and the Principal Owners cannot directly or indirectly (including acting as a lessor, lessee, officer, director, partner, employee, consultant, shareholder or lender) own, operate, lease, engage in, conduct, have any interest in, or assist any other person or entity to engage in, any Competitive Business for one year after the date of expiration or termination by either party with or without cause (i) within 500 meters of the Authorized Location if the Restaurant is a Street Location, or (ii) within the building or venue that the Authorized Location was in if the Restaurant is a Captive-venue Location.
Source: Item 17 — The following paragraph is added to the end of Item 17 of the Disclosure Document: (FDD pages 70–378)
What This Means (2025 FDD)
According to Dq Treat's 2025 Franchise Disclosure Document, if a Dq Treat restaurant is located in a Street Location, the franchisee and principal owners are restricted from engaging in any Competitive Business for one year after the termination or expiration of the franchise agreement. This restriction applies within 500 meters of the Authorized Location.
This means that after the franchise agreement ends, a former Dq Treat franchisee operating a Street Location cannot own, operate, or be involved with a competing business within a 500-meter radius of their former Dq Treat location for one year. This includes activities such as being a lessor, lessee, officer, director, partner, employee, consultant, shareholder, or lender to a competing business.
The noncompete aims to protect Dq Treat's market share and brand recognition by preventing former franchisees from immediately leveraging their experience and knowledge gained while operating a Dq Treat franchise to compete against the system. Franchisees should carefully consider this restriction, as it could limit their business opportunities in the immediate vicinity of their former location after the franchise agreement ends.
It is important to note that the restriction differs for Captive-venue Locations, where the noncompete applies only within the building or venue that the Authorized Location was in. The specific definition of what constitutes a "Competitive Business" would be detailed elsewhere in the Dq Treat Franchise Disclosure Document and related agreements.