After termination or expiration of an Ella Cafe franchise, what is the geographic restriction for non-competition?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in franchise or | Summary |
|---|---|---|
| r. Non-competition | For two years, no ownership or | |
| covenants after the | ||
| franchise is terminated | ||
| or expires | employment by a competitor located within five miles of your former territory or the territory of any other Ella Coffee business operating on the date of termination. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 41–45)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, if the franchise is terminated or expires, the franchisee is subject to a non-competition covenant. This covenant restricts the franchisee, any owner of the business, or any spouse of an owner from having ownership interest in, or being engaged or employed by, a competitor.
The geographic scope of this restriction extends to a five-mile radius. This five-mile radius is calculated from either the former territory of the franchisee's Ella Cafe business or the territory of any other Ella Cafe business operating on the date of termination or expiration. The non-compete lasts for a period of two years.
This non-competition covenant has significant implications for a former Ella Cafe franchisee. It limits their ability to engage in a similar business within a defined area for a specified time, potentially impacting their future career or business opportunities. Franchisees should carefully consider this restriction and its potential impact on their future plans before investing in an Ella Cafe franchise.