What is considered a 'Competitive Business' to a Bang Cookies shop?

According to Bang Cookies's 2024 Franchise Disclosure Document, a 'Competitive Business' is defined as any shop that is the same as or similar to a Bang Cookies Shop. This includes any business, bakery, or shop, including traditional outlets, mobile kiosks, food trucks, and non-traditional outlets, that offers, sells, and/or provides cookies, brownies, and/or cakes. This definition is important because it sets the boundaries for what activities a franchisee is restricted from engaging in during the term of the franchise agreement and potentially after termination.

During the term of the agreement, franchisees are prohibited from owning or having any legal or equitable interest in a Competitive Business, with a minor exception of owning 3% or less in a publicly traded company that is a Competitive Business. Franchisees are also restricted from operating, managing, funding, or performing services for a Competitive Business. These restrictions also apply to the franchisee's owners and spouses, who must also sign a Franchise Owner and Spouse Agreement and Guaranty.

These restrictions are designed to prevent franchisees from unfairly competing with Bang Cookies. Engaging in prohibited activities is considered unfair competition and can cause harm to the franchisor, the Bang Cookies system, and other franchisees. Franchisees should carefully consider these restrictions before entering into a franchise agreement to ensure they do not have any conflicting business interests.