What is the geographic scope of the restriction on offering income tax preparation and related business services after the termination, expiration, or nonrenewal of a Ledgers Franchise Agreement?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
You will not, directly or indirectly, for a 2-year period after the termination, expiration, or nonrenewal of the Franchise Agreement, including a sale of the franchise or your interest in it, offer income tax preparation and related business services in the Territory or within 25 miles of the boundaries of the Territory, or within 25 miles of any other Ledgers outlet of ours or a franchisee of ours in operation at the time.
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD page 38)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, for a period of two years after the termination, expiration, or nonrenewal of the Franchise Agreement, a franchisee is restricted from offering income tax preparation and related business services. This restriction applies within the franchisee's Territory or within 25 miles of the boundaries of the Territory.
Additionally, the restriction extends to within 25 miles of any other Ledgers outlet, whether it is owned by Ledgers itself or by another franchisee, that is in operation at the time of termination, expiration, or nonrenewal. This means that even if a franchisee's Territory is in a rural area, they could still be restricted by the presence of another Ledgers outlet within 25 miles.
This non-compete clause could significantly limit a former Ledgers franchisee's ability to continue offering income tax preparation services in their local area after leaving the franchise system. Prospective franchisees should carefully consider the potential impact of this restriction on their future business plans.