What is the section number in the Batteries Plus Bulbs Franchise Agreement that covers 'Covenants'?
Batteries_Plus_Bulbs Franchise · 2025 FDDAnswer from 2025 FDD Document
14. COVENANTS
- A. Non-Solicitation Of Customers. Franchisee covenants that, during the term of this Agreement, and for a period of two (2) years thereafter, Franchisee will not, directly or indirectly divert or attempt to divert any business, account or customer of the Store or any other Batteries Plus® stores or the System to any competing business.
- B. Covenant Not To Compete During Term. Franchisee (and each Principal Owner) will not, during the term of this Agreement, directly or as an employee, agent, consultant, partner, officer, director or shareholder of any other person, firm, entity, partnership or corporation, own, operate, lease, franchise, conduct, engage in, be connected with, having any interest in, or assist any person or entity engaged in any business (including any e-commerce or internet-based business) that distributes, sells or otherwise deals in, at wholesale or retail, any battery, light bulb or related products, any device repair, key fob repair or replacement, or other services offered at a Batteries Plus® store, or any other related business that is competitive with or similar to a Batteries Plus® store, except: (i) with Franchisor's prior written consent; or (ii) the ownership of securities listed on a stock exchange or traded on the over-the-counter market that represent one percent (1%) or less of that class of securities.
- C. Post-Term Covenant Not To Compete. Franchisee (and each Principal Owner) will not, for a period of two (2) years after this Agreement expires or is terminated or the date on which Franchisee ceases to conduct the business franchised under this Agreement, whichever is later, directly or as an
Source: Item 22 — Contracts (FDD page 80)
What This Means (2025 FDD)
According to the 2025 Batteries Plus Bulbs Franchise Disclosure Document, the section in the Franchise Agreement that addresses covenants is Section 14. This section outlines specific obligations and restrictions for the franchisee, both during the term of the agreement and after its termination or expiration.
Specifically, Section 14(A) details the non-solicitation of customers, preventing the franchisee from diverting business away from Batteries Plus Bulbs stores during the agreement term and for two years afterward. Section 14(B) outlines the covenant not to compete during the term of the agreement, restricting the franchisee (and each Principal Owner) from engaging in any competitive business involving batteries, light bulbs, device repair, or related services, with limited exceptions for investments representing one percent or less of publicly traded securities. Section 14(C) describes the post-term covenant not to compete, which applies for two years after the agreement expires or is terminated, preventing the franchisee from engaging in similar competitive businesses within a 15-mile radius of the former Batteries Plus Bulbs store or any other existing store.
These covenants are typical in franchise agreements to protect the brand's market share and prevent franchisees from using the franchisor's knowledge and resources to compete against the system. The tolling provision in Section 14(C) further protects Batteries Plus Bulbs by extending the non-compete period if the franchisee breaches the covenants or if Batteries Plus Bulbs has to take action to enforce the agreement.