What is the definition of 'Prohibited Activities' for a Bang Cookies franchise?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
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' 2024 Franchise Disclosure Document, 'Prohibited Activities' are specific actions a franchisee is restricted from doing during the term of the franchise agreement. These activities are considered unfair competition and could harm Bang Cookies, the franchise system, and other franchisees.
The prohibited activities include owning or having an interest in a competitive business (with a minor exception of owning 3% or less in a publicly traded company), operating, managing, or providing services to a competitive business, diverting or attempting to divert customers from Bang Cookies, and inducing Bang Cookies' customers to other businesses that are not Bang Cookies Shops. Additionally, any actions violating specific articles in the franchise agreement are also considered prohibited activities.
These restrictions also apply to the franchisee's owners and spouses, who are required to sign a Franchise Owner and Spouse Agreement and Guaranty. This ensures that all parties associated with the franchise are committed to avoiding activities that could negatively impact the Bang Cookies brand and business. Franchisees should carefully review these restrictions to understand the scope of activities they must avoid during the term of their agreement.