How is the 24-month non-compete period tolled for Bang Cookies franchisees?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
You and each Owner and spouse must also promise in writing that, among other things, during the term of the Franchise Agreement you will not participate in any business that in any way competes with the Franchised Business, and that for 24 months after the expiration of termination of the Franchise Agreement (with said period being tolled during any periods of non-compliance), neither you nor your Owners and their spouses will participate in any competitive business located within and/or servicing customers located within your Designated Territory and a 25 mile radius surrounding your Designated Territory. Further you will not participate in any competitive business located within and/or servicing customers located within a 10 mile radius of any other Bang Cookies Shop and/or the designated territory of any other Bang Cookies Shop.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 40)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, the 24-month non-compete period is tolled during any periods of non-compliance. This means that if a franchisee violates the non-compete agreement, the 24-month period will be extended by the length of time the franchisee was in violation.
This tolling provision is significant because it protects Bang Cookies from franchisees who might try to circumvent the non-compete agreement. For example, if a franchisee starts a competing business six months after leaving the Bang Cookies system, the 24-month non-compete period would be tolled for those six months. The franchisee would then be subject to the non-compete for an additional 24 months after they cease operating the competing business.
It is important for prospective Bang Cookies franchisees to understand the terms of the non-compete agreement and the implications of the tolling provision. Franchisees should ensure they fully comply with the non-compete obligations to avoid any extension of the restricted period. This includes understanding the geographic restrictions, which extend to the franchisee's Designated Territory and a 25-mile radius around it, as well as a 10-mile radius of any other Bang Cookies Shop.