Franchise Glossary
Non-Compete Clause
What is Non-Compete Clause in franchising?
A legal provision in the franchise agreement prohibiting the franchisee from operating a competing business during the term and, in many cases, for a defined period after the agreement ends, typically one to two years within a defined radius. Non-competes are standard in franchise agreements. Their scope and enforceability vary by state. A franchise attorney will flag unusually broad post-term non-competes that could restrict your ability to work in your own industry after the franchise relationship ends.