Does a seller's non-compete still apply if the buyer later resells the business to someone else?

It depends on whether the original purchase agreement made the seller's covenant assignable to the buyer's successors, since that is not automatic. Restrictive covenants are usually drafted to protect the specific goodwill a particular buyer purchased, and while many purchase agreements expressly state that the seller's obligations, including the non-compete, extend to and bind "successors and assigns" of the buyer, an agreement that is silent on assignability can leave this genuinely open to argument.

A seller could try to argue that a covenant given to protect one buyer's purchased goodwill was personal to that buyer and its business, and does not automatically extend indefinitely down a chain of later resales to parties the seller never dealt with or considered when the covenant was signed. Whether that argument succeeds depends heavily on the specific wording used and how the courts treat the particular clause, since this is not an area with one settled default rule. A new purchaser relying on an existing seller non-compete carried over from an earlier sale should confirm the original agreement's assignment language before assuming it applies to them.