After a transfer of the Endless Summer Sweets franchise, how long does the post-term non-compete restriction last?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
For two years after this Agreement expires or is terminated for any reason or, where applicable, for two years after a Transfer, no Restricted Party shall directly or indirectly operate, have any ownership interest in, lend money or provide financial assistance to, provide any services to, or be employed by, any Competitor which is located at the premises upon which the Endless Summer Sweets is or was located or is located or within a twenty-five (25) mile radius of the Franchisee's location or any other Endless Summer Sweets location, whether owned by Franchisor or another Franchisee. Franchisee expressly agrees that the two-year period and the twentyfive (25) mile radius are the reasonable and necessary time and distance needed to protect Franchisor if this Agreement expires or is terminated for any reason. Franchisee agrees that the two-year time period of the non-competition provision shall not accrue during any time period that Franchise or any Restricted Party is in violation of this covenant. If this Agreement is terminated before the Territory is determined,
Source: Item 23 — RECEIPTS (FDD pages 39–125)
What This Means (2024 FDD)
According to the 2024 Endless Summer Sweets Franchise Disclosure Document, if you transfer your franchise, the post-term non-compete restriction lasts for two years. This restriction applies to the franchisee, any owner, or any spouse of an owner, collectively referred to as "Restricted Parties."
During this two-year period, these Restricted Parties are prohibited from directly or indirectly operating, having any ownership interest in, lending money or providing financial assistance to, providing services to, or being employed by any competitor. This restriction applies to competitors located at the premises where the Endless Summer Sweets was or is located, or within a 25-mile radius of the franchisee's location or any other Endless Summer Sweets location, whether owned by the franchisor or another franchisee.
Endless Summer Sweets emphasizes that the two-year period and 25-mile radius are deemed reasonable and necessary to protect the franchisor's interests if the agreement expires or is terminated. Furthermore, the non-competition period will not accrue during any time the franchisee or any Restricted Party violates this covenant. If the agreement is terminated before the territory is determined, the non-competition area will be the Development Area and the territory of any other Endless Summer Sweets business operating on the date of termination.