Does the Ella Cafe non-compete agreement apply outside of the United States?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
The rights granted to Franchisee under this Agreement are nonexclusive, and Franchisor and its Affiliates have and retain all rights within and outside the Designated Area, except those expressly granted to Franchisee in the Agreement.
Accordingly, Franchisor, its Affiliates, and any other authorized person or entity will have the right, among others, (a) to operate, and license others to operate, ELLA Coffee House at any location outside the Designated Area and in any Reserved Area (whether located inside or outside the Designated Area), including ELLA Coffee House that are adjacent to or surrounded by the Designated Area (b) to advertise and promote the System in the Designated Area (c) to operate, and license others to operate, ELLA Coffee House at any locations in any Reserved Area, including Reserved Areas that are in the Designated Area (d) to operate, and license others to operate, other coffee houses, ghost kitchens, or other food service businesses utilizing trademarks other than ELLA COFFEE HOUSE inside and outside the Designated Area and in any Reserved Area (whether located inside or outside the Designated Area and (e) to engage, directly or indirectly, at wholesale, retail, or otherwise, in the production, distribution, license, and sale of any and all food, beverages, or other services and products, under the Marks or under other names or marks through any method of distribution, other than a ELLA Coffee House, regardless of the competitive impact, and including, but not limited to, from vending machines and kiosks, food trucks, grocery stores, and other food retailers and through mail order catalogs and the Internet, regardless of the proximity to, or the competitive impact on, Coffee Houses developed by Franchisee.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2024 FDD)
Based on the 2024 Ella Cafe Franchise Disclosure Document, the franchise agreement grants franchisees rights within a specific 'Designated Area.' However, Ella Cafe retains rights both within and outside this area.
Specifically, Ella Cafe maintains the right to operate or license others to operate Ella Coffee Houses at any location outside the Designated Area. This includes locations adjacent to or surrounded by the franchisee's Designated Area. Ella Cafe can also operate other coffee houses using different trademarks inside and outside the Designated Area.
This means that while franchisees have some territorial protection within their Designated Area, Ella Cafe can still operate or franchise other locations, even internationally, without violating the agreement. A prospective franchisee should consider this when evaluating the potential market and competition for their Ella Cafe franchise.