What is the geographic scope of the non-compete clause during the term of the Ella Cafe agreement?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
or other limited liability company own, maintain, engage in, be employed by, advise, assist, invest in, franchise, make loans to, or have any interest or relationship or association with any casual, fast-casual, or quick-service coffee house, retail Coffee House, 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 within a five-mile radius of any Ella Café Coffee House , nor will I directly or indirectly employ or seek to employ any employee of Franchisor or an Affiliate of Franchisor (collectively, "Employers"), unless such employee's employment has been terminated for 120 days or more, or such employee has obtained written consent from Employer that the employee may be hired. The restrictions in this Section 6 do not apply to my ownership of less than a five percent beneficial interest in the outstanding securities of any publicly-held corporation.
Source: Item 23 — RECEIPTS (FDD pages 50–181)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, during the term of the agreement, the non-compete clause 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 within a five-mile radius of any Ella Cafe Coffee House.
This restriction applies if you, as a franchisee, or other limited liability company own, maintain, engage in, are employed by, advise, assist, invest in, franchise, make loans to, or have any interest or relationship or association with such establishments.
Additionally, franchisees are prohibited from employing or seeking to employ any employee of Ella Cafe or its affiliates unless the employee's employment has been terminated for 120 days or more, or the employee has obtained written consent from the Employer that the employee may be hired. However, the restrictions in this section do not apply to ownership of less than a five percent beneficial interest in the outstanding securities of any publicly-held corporation.