After the Ledgers Franchise Agreement expires or terminates, what geographic area is considered the Restricted Market?

According to the 2025 Ledgers Franchise Disclosure Document, the Restricted Market is defined as the territory granted to the franchisee or within 25 miles of the boundaries of that territory. This restriction is in effect during the term of the Franchise Agreement and for two years after the agreement's expiration or termination. This means that for a period of two years after leaving the Ledgers franchise system, a former franchisee cannot own or manage a business offering advisory, compliance, recordkeeping, payroll, or tax services within their former territory or within 25 miles of its borders.

This non-compete clause is a standard practice in franchising to protect the brand and other franchisees from unfair competition by someone who has inside knowledge of the Ledgers system. The restriction applies even if the franchisee sells their franchise business, indicating that the obligation is tied to the individual who operated the franchise, not just the business itself.

Prospective franchisees should carefully consider the implications of this post-term non-compete. It could limit their future business opportunities if they decide to leave the Ledgers system. It is important to fully understand the definition of the territory in Schedule 1 of the Franchise Agreement, as the 25-mile radius extends from the boundaries of the territory, not just the franchisee's specific location within it.

It is also important to note that the enforceability of non-compete agreements can vary by state. For example, the California addendum to the Ledgers Franchise Agreement notes that the non-compete provisions extending beyond the termination of the agreement may not be enforceable under California law. Therefore, franchisees should consult with legal counsel to understand the specific enforceability of the non-compete in their state.