What article of the Bang Cookies Franchise Agreement contains the terms and conditions related to non-competition during the franchise relationship?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
6.D. RESTRICTIVE COVENANTS: UNFAIR COMPETITION AND IN-TERM NON-COMPETITION OBLIGATIONS
Franchisee agrees that during the Term of this Agreement, Franchisee shall not engage in the following activities (the "Prohibited Activities"): (a) owning and/or having any legal or equitable interest whether, as an individual proprietor, owner, partner, member or shareholder of a Corporate Entity, or, in any similar capacity, in a Competitive Business other than, owning an interest of 3% or less in a publicly traded company that is a Competitive Business; (b) operating, managing, funding and/or performing services whether, as an employee, officer, director, manager, consultant, representative, agent, and/or creditor or, in any similar capacity, for or benefitting a Competitive Business; (c) diverting or attempting to divert any business or customers from Franchisor or, one of Franchisor's affiliates or franchisees; (d) inducing any customer or client of Franchisor, Franchisor's affiliates, franchisees of the System, or, of Franchisee, to any other person or business that is not a Bang Cookies Shop; and/or (e) engaging in any actions, inactions, and/or activities in violation of Articles 6.B. and/or 6.C. of this Agreement (all, individually and, collectively, referred to as the "Prohibited Activities"). Franchisee agrees that if Franchisee were to engage in the Prohibited Activities that such actions would be unfair, would constitute unfair competition and would cause harm to Franchisor, the System and other Bang Cookies Shop franchisees. Franchisee agrees that the foregoing covenants and obligations shall also apply to Franchisee's Owners and Spouses and that Franchisee's Owners and Spouses shall each execute and deliver to Franchisor the Franchise Owner and Spouse Agreement and Guaranty in the form attached to this Agreement as Exhibit 1.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, Article 6.D of the Franchise Agreement outlines the terms and conditions regarding non-competition during the term of the agreement. This section is titled "RESTRICTIVE COVENANTS: UNFAIR COMPETITION AND IN-TERM NON-COMPETITION OBLIGATIONS."
This article specifies that franchisees are prohibited from engaging in activities such as owning or having an interest in a competitive business (with a minor exception for owning 3% or less of a publicly traded company), operating or managing a competitive business, diverting customers from Bang Cookies, or violating other restrictive covenants within the agreement. These restrictions apply not only to the franchisee but also to their owners and spouses, who are required to sign a separate agreement.
Bang Cookies emphasizes that engaging in these prohibited activities would be considered unfair competition and would cause harm to the franchisor, the Bang Cookies system, and other franchisees. Franchisees should carefully review Article 6.D to fully understand the scope of these restrictions and their obligations during the term of the franchise agreement.