Is diverting business from Hck Hot Chicken considered a 'Prohibited Activity'?

According to Hck Hot Chicken's 2025 Franchise Disclosure Document, diverting business from the franchisor or its affiliates or franchisees is explicitly defined as a 'Prohibited Activity.' This definition is crucial for prospective franchisees to understand, as engaging in such activities can have significant legal and financial repercussions.

The franchise agreement prohibits unfair competition during the relationship as a manager or officer of the Franchisee's Hck Hot Chicken business and also after the relationship during the Restricted Period. The Restricted Period is generally two years after ceasing to be a manager or officer, but could be reduced to one year if a court deems the two-year period unenforceable. The agreement also specifies a Restricted Territory, which is a 25-mile radius from the franchisee's Hck Hot Chicken business, potentially reduced to 12.5 miles if the initial territory is deemed too broad by a court.

Furthermore, the agreement extends these restrictions to immediate family members, creating a presumption that the franchisee has violated the agreement if a family member engages in Prohibited Activities during the restricted periods. However, the franchisee can rebut this presumption with evidence proving they did not disclose confidential information to the family member. This clause highlights the importance of maintaining confidentiality and avoiding any actions that could be construed as unfair competition, even through family members. Understanding these stipulations is essential for any potential Hck Hot Chicken franchisee to ensure compliance and avoid potential legal issues.