NON-COMPETES AND THE FRANCHISE AGREEMENT
Franchises are everywhere…from McDonald’s to Bed, Bath &Beyond! Most of the agreements which govern these franchises have non-compete provisions. Most franchise agreements have two types of non-compete provisions. First, the “in-term” restriction applies to the parties during the life of the franchise agreement. Secondly, the “post-term” restriction applies to what the parties can and cannot do after the franchise agreement has ended.
Seems to me that both types of these restrictions should be governed by the same set of laws. In Virginia that means the restriction is: (a) reasonable from the standpoint of the employer/franchisor; (b) not an unreasonable restriction on the ability of the employee/franchisee to earn a living; and (c) not contrary to good public policy. A Georgia court agreed and the International Franchise Association (IFA), which represents franchisors not franchisees is upset.
The IFA filed a legal brief in the appeal of the Georgia court’s decision in Atlanta Bread Company International asking that the “in-term” and “post-term” restrictions be treated differently and to allow greater and harsher restrictions for the “in-term” non-competes. Read the IFA’s memorandum in Atlanta Bread International.
Sounds like Hogwash to me!