Does the non-compete agreement for Azal Coffee extend to managers of the franchisee?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
You and your shareholders, officers, directors, partners, members, managers, owners and investors, Family Members, and affiliates, must not, during the term of this Agreement and for a period of three (3) years after termination, expiration, or non-renewal of this Agreement, directly or indirectly: (a) divert or attempt to divert any business or customer of the Franchise Business or any other Store to any Competing Business by direct or indirect inducements or otherwise; (b) sponsor, appoint or encourage or influence or promote friends, relatives or associates to operate a Competing Business; or (c) employ any person or furnish of permit access to our Confidential Information to any person who is engaged or has arranged to become engaged in any activity in competition with Azal Coffees, including involvement, either as an owner (except no more than one percent (1%) of the publicly traded securities of an entity), member, manager, partner, director, officer, employee, consultant, lender, representative or agent, or in any other capacity, of any business that is involved, in whole or in part, in a Competing Business or in any business or entity that franchises, licenses or otherwise grants to others the right to operate a Competing Business.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, the non-compete agreement extends to the franchisee's managers. Specifically, the agreement applies not only to the franchisee but also to their shareholders, officers, directors, members, managers, partners, owners, investors, family members, and affiliates. This broad scope ensures that various parties connected to the franchise are restricted from engaging in activities that could harm Azal Coffee's business interests.
During the term of the Franchise Agreement and for three years after its termination, expiration, or non-renewal, these parties are prohibited from diverting business or customers to competing businesses, sponsoring or promoting competing businesses, or employing individuals involved in competitive activities. This includes involvement as an owner (with a minor exception for publicly traded securities), member, manager, partner, director, officer, employee, consultant, lender, representative, or agent of a competing business.
This non-compete extends to any business that competes with Azal Coffee Stores, including those selling similar coffee beverages, baked goods, food products, coffee beans, or coffee accessories. The geographic scope of the non-compete includes the franchise location and areas within 25 miles of the franchise location and any other Azal Coffee Store. This comprehensive restriction aims to protect Azal Coffee's market position and confidential information by preventing those with close ties to the franchise from using their knowledge and resources to compete against it.