What is the duration of the non-competition covenant after the franchise is terminated or expires for Golden Krust Caribbean Restaurant?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
| PROVISION | SECTION IN FRANCHISE | SUMMARY | |
|---|---|---|---|
| (r) Non-competition covenants after the franchise is terminated or expires | Section XVI.D. | No interest in competing business for 2 years at, or within 10 miles of premises of Restaurant or within 5 miles of any other Golden Krust Restaurant that is in operation or under construction (same restrictions apply after assignment) |
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 29–32)
What This Means (2024 FDD)
According to Golden Krust Caribbean Restaurant'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 from having an interest in a competing business for a period of 2 years.
The restriction applies at the premises of the Golden Krust Caribbean Restaurant location or within 10 miles of that location. It also extends to within 5 miles of any other Golden Krust Caribbean Restaurant that is in operation or under construction.
These restrictions also apply after assignment of the franchise. This means that even if the franchisee sells or transfers the franchise to someone else, these non-competition terms remain in effect. Prospective franchisees should carefully consider the implications of these restrictions, as they could limit their business opportunities after leaving the Golden Krust Caribbean Restaurant system.