Does the Bang Cookies franchise agreement specify that the restrictive covenants apply to the franchisee's owners and spouses?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee agrees that the foregoing covenants and obligations shall also apply to: (a) 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, the restrictive covenants within the franchise agreement do indeed extend to the franchisee's owners and spouses. Specifically, the agreement stipulates that these individuals are also bound by the covenants related to confidential information, know-how, and unfair competition, both during the term of the agreement and after its expiration or termination. This is a fairly standard practice in franchising, as franchisors seek to protect their brand and trade secrets from being exploited by anyone closely associated with the franchisee.
To ensure compliance, Bang Cookies requires that the franchisee's owners and spouses each execute and deliver a "Franchise Owner and Spouse Agreement and Guaranty," which is included as Exhibit 1 to the Franchise Agreement. This agreement likely outlines the specific obligations and restrictions applicable to these individuals, as well as guarantees their adherence to the covenants. By having owners and spouses sign a separate agreement, Bang Cookies aims to create a direct contractual relationship with them, making it easier to enforce the restrictive covenants.
This requirement has significant implications for prospective Bang Cookies franchisees. It means that not only will the franchisee be bound by the restrictive covenants, but their owners and spouses will also be personally liable for any breaches. Therefore, franchisees need to ensure that their owners and spouses are fully aware of the restrictions and obligations outlined in the Franchise Agreement and the Franchise Owner and Spouse Agreement and Guaranty. Failure to do so could result in legal action against both the franchisee and their owners and spouses. This is a critical point to consider when evaluating the Bang Cookies franchise opportunity, as it could impact the personal and professional lives of those closely associated with the franchisee.