Are the non-competition restrictions the same after assignment of a Golden Krust Caribbean Restaurant franchise?

According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, the non-competition covenants that apply after the franchise is terminated or expires also apply after assignment of the franchise. Specifically, these restrictions prevent the franchisee from having an interest in a competing business for two years. This restriction applies at the premises of the Golden Krust Caribbean Restaurant location or within 10 miles of that location. It also applies within 5 miles of any other Golden Krust Caribbean Restaurant that is in operation or under construction.

This means that if a Golden Krust Caribbean Restaurant franchise is assigned to a new franchisee, the original franchisee (the one who assigned the franchise) is still subject to the same non-compete restrictions as if the franchise agreement had been terminated or expired. This prevents the original franchisee from immediately opening a competing business near the assigned location or other Golden Krust Caribbean Restaurant locations.

Non-compete clauses are common in franchising to protect the brand and market area of the franchisor and other franchisees. The specific terms, such as the duration and geographic radius, can vary among different franchise systems. Prospective Golden Krust Caribbean Restaurant franchisees should carefully review Section XVI.D of the Franchise Agreement to fully understand the scope and implications of these non-competition covenants, both during and after the franchise term, as well as after any assignment.