What is a Bang Cookies franchisee prohibited from inducing customers to do?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
"Prohibited Activities" refers to and means any or all of the following: (a) owning and/or having any legal or equitable interest (whether as an individual proprietor or as an 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 a Competitive Business; (c) diverting or attempting to divert any business or customers from us (or one of our affiliates or franchisees); and/or (d) inducing any customer or client of ours (or of one of our affiliates or franchisees) or of Franchisee to any other person business that is not a Bang Cookies Shop.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, a franchisee is prohibited from inducing any customer or client of Bang Cookies (or its affiliates or franchisees), or of the franchisee themselves, to another business that is not a Bang Cookies Shop. This restriction is part of the broader 'Prohibited Activities' outlined in the agreement.
This means that during the term of the franchise agreement, a Bang Cookies franchisee cannot actively encourage or persuade customers to switch to a competing business. This restriction aims to protect the Bang Cookies brand and prevent franchisees from diverting business to other ventures, whether directly or indirectly.
This type of clause is standard in franchise agreements to protect the brand and prevent franchisees from undermining the system. Prospective franchisees should understand that this restriction applies not only to their own customers but also to customers of the franchisor and other franchisees within the Bang Cookies system. Violating this provision could lead to a breach of the franchise agreement and potential legal consequences.