After my relationship with the Hck Hot Chicken franchise ends, when am I prohibited from unfairly competing?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
on Know-how, Intellectual Property and the System shall not apply to any information which is information publicly known or becomes lawfully known in the public domain other than through a breach of this Agreement or is required or compelled by law to be disclosed, provided that you will give reasonable notice to us to allow us to seek protective or other court orders.
- 4. Unfair Competition During Relationship. You agree not to unfairly compete with us at any time while you are a manager or officer of Franchisee's HCK Hot Chicken business by engaging in any Prohibited Activities.
- 5. Unfair Competition After Relationship. You agree not to unfairly compete with us during the Restricted Period by engaging in any Prohibited Activities; provided, however, that the Prohibited Activity relating to having an interest in a Competitive Business will only apply with respect to a Competitive Business that is located within or provides competitive goods or services to customers who are located within the Restricted Territory. If you engage in any Prohibited Activities during the Restricted Period, then you agree that your Restricted Period will be extended by the period of time during which you were engaging in the Prohibited Activity.
- 6. Immediate Family Members. You acknowledge that you could circumvent the purpose of this Agreement by disclosing Know-how to an immediate family member (i.e., spouse, parent, sibling, child, grandparent or grandchild). You also acknowledge that it would be difficult for us to prove whether you disclosed the Know-how to family members. Therefore, you agree that you will be presumed to have violated
the terms of this Agreement if any member of your immediate family: (i) engagesin any Prohibited Activities during any period of time during which you are prohibited from engaging in the Prohibited Activities; or (ii) uses or discloses the Know-how. However, you may rebut this presumption by furnishing evidence conclusively showing that you did not disclose the Know-how to the family member.
- 7. Covenants Reasonable. You acknowledge and agree that: (i) the terms of this Agreement are reasonable both in time and in scope of geographic area; and (ii) you have sufficient resources and business experience and opportunities to earn an adequate living while complying with the terms of this Agreement. YOU HEREBY WAIVE ANY RIGHT TO CHALLENGE THE TERMS OF THIS AGREEMENT AS BEING OVERLY BROAD, UNREASONABLE, OR OTHERWISE UNENFORCEABLE.
- 8. Breach. You agree that failure to comply with the terms of this Agreement will cause substantial and irreparable damage to us and/or other HCK Hot Chicken franchisees for which there is no adequate remedy at law.
Source: Item 22 — CONTRACTS (FDD pages 54–55)
What This Means (2025 FDD)
According to the 2025 Hck Hot Chicken Franchise Disclosure Document, if you are a manager or officer of a Hck Hot Chicken franchise, you are subject to a restricted period during which you cannot unfairly compete. This "Restricted Period" extends for two years after you cease being a manager or officer. However, if a court deems this two-year period too long to be enforceable, the restricted period will be one year.
During this Restricted Period, you are prohibited from engaging in "Prohibited Activities." These activities include owning, operating, or having any interest in a Competitive Business, or diverting or attempting to divert business from Hck Hot Chicken. An exception exists if you own an interest of five percent or less in a publicly-traded company that is a Competitive Business.
The restriction regarding having an interest in a Competitive Business applies only to businesses located within the "Restricted Territory" or those providing competitive goods or services to customers within that territory. The Restricted Territory is defined as the geographic area within a 25-mile radius of the Hck Hot Chicken franchise location and all other Hck Hot Chicken businesses operating or under construction. If a court finds this territory too broad, the Restricted Territory will be reduced to a 12.5-mile radius from the franchise location. Furthermore, if you engage in any Prohibited Activities during the Restricted Period, the period will be extended by the amount of time you were engaged in those activities.