How is the Restricted Period affected if a Bang Cookies franchisee engages in prohibited activity?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
If you engage in any Prohibited Activities during the Restricted Period, then you agree that your Restricted Period will be extended by the period of time during which you were engaging in the prohibited activity (any such extension of time will not be construed as a waiver of your breach or otherwise impair any of our rights or remedies relating to your breach).
You acknowledge and agree that this restriction is fair and reasonable and that if you did engage in a Prohibited Activity that such actions would constitute acts of unfair competition and will irreparably harm us and the System.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, if a franchisee engages in prohibited activities during the restricted period, the restricted period will be extended. The extension will be for the same amount of time that the franchisee was engaging in the prohibited activity. This extension does not excuse the franchisee's breach of contract, nor does it affect Bang Cookies's rights or remedies regarding the breach.
Prohibited activities include owning an interest in a competitive business (with a minor exception for publicly traded companies), operating or performing services for a competitive business, diverting customers from Bang Cookies, or violating confidentiality agreements. These restrictions are designed to protect Bang Cookies's market position and confidential information.
This clause ensures that Bang Cookies can enforce non-compete obligations effectively. By extending the restricted period, Bang Cookies aims to prevent franchisees from unfairly competing using knowledge and resources gained during their time with the franchise. Prospective franchisees should understand that any violation of these terms can lead to a prolonged period of non-competition, impacting their ability to operate a similar business after leaving the Bang Cookies system.