Can a Bath Tune Up franchisee advise a competitor during the term of the agreement?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
(b) In consideration for this specialized training, trade secrets, confidential information, and rights, Franchisee covenants that, except as otherwise approved in writing by Franchisor, Franchisee will not during the Term, either directly or indirectly, for itself or through, on behalf of, or in conjunction with any people, partnership, or corporation:
(ii) Own, maintain, operate, engage in, or have any financial or beneficial interest in (including any interest in corporations, partnerships, trusts, unincorporated associations, or joint ventures), advise, assist, or make loans to, any Competitor located within the United States, its territories or commonwealths, or any other country, province, state, or geographic area in which Franchisor has used, sought registration of, or registered the Marks or similar marks, or operates or licenses others to operate a business under the Marks or similar marks.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, a franchisee is restricted from advising a competitor during the term of the agreement. Specifically, the franchisee cannot "advise, assist, or make loans to, any Competitor located within the United States, its territories or commonwealths, or any other country, province, state, or geographic area in which Franchisor has used, sought registration of, or registered the Marks or similar marks, or operates or licenses others to operate a business under the Marks or similar marks."
This restriction means that during the term of the franchise agreement, a Bath Tune Up franchisee is prohibited from providing any form of advice or assistance, including financial support, to any business that competes with Bath Tune Up within the specified geographic areas. This includes not only direct competitors within the franchisee's territory but also any competitor operating in regions where Bath Tune Up has established its brand through trademarks or licensing agreements.
This clause is designed to protect Bath Tune Up's market position, trade secrets, and overall business model by preventing franchisees from supporting rival businesses that could undermine the brand's success. The definition of "Competitor" is broad, encompassing any business that derives revenue from the sale of bath improvements or similar services, further solidifying the restriction's scope. Violation of this clause could lead to breach of contract and potential legal repercussions for the franchisee.
After the agreement expires, the franchisee is restricted for a period of two years from diverting business or customers to a competitor. However, the restriction on advising a competitor is limited to the term of the agreement.