ANALYSIS: No Slowdown in Suits to Enforce Franchise Noncompetes

Franchise noncompetes weren’t included in the now-stalled Federal Trade Commission (FTC) ban on noncompetes. Yet the agency last year signaled its wariness of such agreements because in many instances the franchisee-franchisor relationship can mirror that of the employee-employer.

The FTC’s comments, however, haven’t deterred litigation to enforce such agreements. The number of these lawsuits rose last year, unlike lawsuits to enforce employment noncompetes, which declined in 2024. The Commission will likely have to take stronger measures to discourage franchise noncompetes.

Words of Caution from the FTC

The FTC last year made various statements suggesting that it’s wary of noncompetes in ...