Does the restriction on offering income tax preparation and related business services after termination of a Ledgers franchise apply if the franchise is sold?

According to Ledgers' 2025 Franchise Disclosure Document, the restriction on offering income tax preparation and related business services after the termination, expiration, or nonrenewal of the Franchise Agreement applies even if the franchise is sold. Specifically, 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, a franchisee cannot 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.

This means that if a Ledgers franchisee sells their franchise, they are still bound by the non-compete clause for two years. This restriction prevents the former franchisee from immediately opening a competing business nearby or joining another firm that offers similar services in the same area. The geographic scope includes the franchisee's original territory and a 25-mile radius around it, as well as a 25-mile radius around any other Ledgers location.

This provision protects Ledgers' interests by preventing a former franchisee from leveraging their experience and knowledge gained while operating a Ledgers franchise to directly compete with the brand shortly after leaving the system. Prospective franchisees should carefully consider this restriction, as it could impact their future business opportunities if they decide to sell their franchise.