What restrictions does the Dq Treat franchise agreement place on my involvement in other businesses during the term of the franchise?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in franchise agreement | Summary |
|---|---|---|
| q. Non-competition covenants during the term of the franchise | Section 10.5 | No direct or indirect involvement in the operation of 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 (“Competitive Business”). |
Source: Item 16 — UItem 16U***:** U**Restrictions on What the Franchisee May Sell (FDD pages 51–55)
What This Means (2025 FDD)
According to the 2025 Dq Treat Franchise Disclosure Document, Section 10.5 of the franchise agreement outlines non-competition covenants during the term of the franchise. Specifically, as a Dq Treat franchisee, you are prohibited from direct or indirect involvement in the operation of any quick-service restaurant that serves hamburgers but does not serve alcohol.
Additionally, you cannot be involved in any business that generates more than 10% of its revenue from the sale of ice cream, yogurt, frozen custard, fruit-based beverages, soft-serve, or other frozen treats. The franchise agreement refers to these types of businesses as "Competitive Businesses."
These restrictions are in place to protect Dq Treat's market share and prevent franchisees from operating competing businesses that could draw customers away from their Dq Treat franchise. It is important for prospective franchisees to carefully consider these restrictions and ensure they do not have any existing business ventures that would violate the non-competition covenants.