What is the duration of the continuous uninterrupted period of non-competition for Ella Cafe, commencing upon the cessation or termination of my relationship?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
hip or association with, any fast casual, quick service, or full service coffee house, or retail Coffee House of any type, that offers coffee and/or assorted café items as a primary menu item or that derives more than 25% of its revenue from the sale of coffee and/or assorted café items, other than an Coffee House operated pursuant to a then-currently effective Franchise Agreement with Franchisor, at any location within the United States, its territories or commonwealths, or any other country, province, state, or geographic area in which Franchisor or its Affiliates have used, sought registration of, or registered the Marks or similar marks or operate or license others to operate a business under the Marks or similar marks.
- 10.2. Noncompetition After Expiration or Termination of Agreement. Commencing upon the later of: (a) a transfer permitted under Section 8. of this Agreement, expiration of this Agreement (without renewal), or termination of this Agreement (regardless of the cause for termination); or (b) a final court order (after all appeals have been taken) with respect to any of
the foregoing events or with respect to enforcement of this Section 10.2., and continuing for an uninterrupted period of two years thereafter, Developer will not, either directly or indirectly, for itself, or through, on behalf of, or in conjunction with any person, persons, or legal entity, own, maintain, advise, operate, engage in, be employed by, make loans to, invest in, provide any assistance to, or have any interest in (as an owner or otherwise) or relationship or association with any casual, fast-casual, or quick-service coffee house, retail Coffee House, coffee/food truck, kiosk, cart, or store inside store of any type, that offers coffee and/or assorted café items as a primary menu item or that derives more than 25% of its revenue from the sale of coffee and/or assorted café items, other than a Ella Coffee Company, LLC Coffee House operated pursuant to a then-currently effective Franchise Agreement with Franchisor, that: (i) is, or is intended to be, located at the location of the former Location; (ii) is within a five-mile radius of the former Location;
Source: Item 23 — RECEIPTS (FDD pages 50–181)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, if you are a Developer, you are subject to a non-compete agreement for two years after the transfer, expiration, or termination of your Development Agreement. This non-compete period begins after the latest of either the transfer, expiration, or termination date, or after all appeals have been taken from a final court order related to these events or enforcement of the non-compete. This restriction also applies to departing owners of the Developer entity. The non-compete restricts involvement with any casual, fast-casual, or quick-service coffee house, retail Coffee House, coffee/food truck, kiosk, cart, or store inside store of any type, that offers coffee and/or assorted café items as a primary menu item or that derives more than 25% of its revenue from the sale of coffee and/or assorted café items.
The non-compete applies to locations at the former Ella Cafe location, within a five-mile radius of the former location, or within a five-mile radius of any other Ella Cafe operating under the System and Marks. This geographic scope extends to any location within the United States, its territories, or commonwealths, or any other country, province, state, or geographic area where Ella Cafe or its affiliates have used, sought registration of, or registered the Marks or similar marks, or operate or license others to operate a business under the Marks or similar marks.
It's important to note that the time periods related to these non-compete obligations will be suspended during any period of noncompliance, effectively extending the restriction if you violate the terms. This means that any breach of the non-compete agreement will pause the clock, and the two-year period will not continue until the non-compliance ceases. This provision is designed to strongly discourage any violation of the non-compete terms.