Does the post-term non-compete covenant for Petro Stopping Center extend to the franchisee's spouse and children?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) Post-Term Non-Compete Covenants. You and your Owners agree that, for a period of two (2) years commencing on the effective date of termination or expiration of this Agreement, or the date on which a Person restricted by this Section begins to comply with this Section, whichever is later, neither you nor any of your Owners (nor any of your or your Owners' spouses or children) will:
- (i) have any direct or indirect interest as a disclosed or beneficial Owner, investor, partner, director, officer, employee, franchisee, licensee, consultant, operator, licensor, manager, representative, landlord, sub-landlord, tenant or agent or in any other capacity in any Competitive Business operating:
- within the Protected Area (if any), including at the Site;
- within 75 miles of the Protected Area (if any), and if not, within 75 miles of the Site, and including at the Site;
- within 75 miles of any other Petro Center (franchised or otherwise) in operation or which is under construction and granted the right to operate in such area on the later of the effective date of the termination or expiration of this Agreement or the date on which a Person restricted by this Section complies with this Section; or
- anywhere in the United States or Canada in connection with a regional or national chain operating a Competitive Business (including but not limited to Pilot, Bosselman, Flying J, Love's, or Sapp Bros.).
Source: Item 17 — RENEWAL TERMS. (FDD pages 208–228)
What This Means (2025 FDD)
According to Petro Stopping Center's 2025 Franchise Disclosure Document, the post-term non-compete covenant does extend to the franchisee's spouse and children. Specifically, the agreement states that 'you nor any of your Owners' spouses or children' are restricted from engaging in competitive business activities for a period of two years after the termination or expiration of the franchise agreement. This restriction applies to various roles, including owner, investor, partner, director, officer, employee, franchisee, licensee, consultant, operator, licensor, manager, representative, landlord, sub-landlord, tenant, or agent in a Competitive Business.
This non-compete clause has significant implications for the franchisee and their family. It restricts not only the franchisee but also their spouse and children from being involved in any competitive business within specific geographic areas. These areas include the Protected Area (if any), within 75 miles of the Protected Area or the Site, within 75 miles of any other Petro Center, or anywhere in the United States or Canada in connection with a regional or national chain operating a Competitive Business. This broad scope means that the franchisee's family members are significantly limited in their career or business options within the defined areas for two years after the franchise agreement ends.
Such clauses are relatively common in franchise agreements to protect the franchisor's business interests and market share. However, the inclusion of the franchisee's spouse and children is a notable point. Prospective franchisees should carefully consider the implications of this extended restriction on their family's future opportunities. It is advisable to seek legal counsel to fully understand the scope and enforceability of this non-compete covenant and to negotiate terms if possible.