Tremors were felt throughout the franchise community when a recent article in the Huffington Post reported that the Jimmy Johns sandwich franchise is under Congressional scrutiny for its franchisees’ practice of requiring lower level employees to sign non-competition agreements. The agreements prohibit the employees from working for another restaurant that receives more than 10% of its business from the sale of sandwiches for two years after they leave Jimmy Johns. Although it is unclear whether the franchisor requires or endorses this practice, it seems to be pervasive within the franchise system. Two United States Representatives, describing the agreements as “anti-competitive and intimidating to workers,” have asked the Federal Trade Commission to investigate the practice.
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