Does the venue provision of the Batteries Plus Bulbs agreement survive termination?
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 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 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 that is located at the Store or within a fifteen (15) mile radius of the former site of the Store or any other then existing Batteries Plus® store; provided, however, that this Section 14(C) will not apply to: (i) other stores that Franchisee operates under a franchise agreement with us; or (ii) the ownership of securities listed on a stock exchange or traded on the over-thecounter market that represent one percent (1%) or less of that class of securities. For purposes of this Section, any form of e-commerce business or website that distributes, sells or otherwise deals in, at wholesale or retail, any battery, light bulb or related products or 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 will be in violation of this provision if such ecommerce business or website offers, sells or otherwise makes its products or services available to individuals residing within or businesses located within fifteen (15) mile radius of the former site of the Store or any other then-existing Batteries Plus® store. Franchisee agrees that the length of time in this Section 14(C) will be tolled for any period during which Franchisee is in breach of the covenants or any other period during which Franchisor seeks to enforce this Agreement.
Source: Item 22 — Contracts (FDD page 80)
What This Means (2025 FDD)
According to the 2025 Batteries Plus Bulbs FDD, the franchise agreement contains a post-term covenant not to compete. During the term of the agreement, and for two years after the agreement expires, is terminated, or the date on which the franchisee ceases to conduct business, the franchisee is prohibited from diverting or attempting to divert any business, account, or customer of the store or any other Batteries Plus Bulbs store to any competing business.
Batteries Plus Bulbs also specifies that for a period of two years after the agreement expires or is terminated, the franchisee (and each Principal Owner) cannot be involved with any business that distributes, sells, or deals in batteries, light bulbs, related products, device repair, key fob repair or replacement, or other services offered at a Batteries Plus Bulbs store. This includes being an employee, agent, consultant, partner, officer, director, or shareholder of any entity engaged in such a business. This restriction applies within a fifteen (15) mile radius of the former Batteries Plus Bulbs store location or any other existing Batteries Plus Bulbs store.
These restrictions do not apply to owning 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. The agreement also states that the length of time in this section will be tolled for any period during which the franchisee is in breach of the covenants or any other period during which the franchisor seeks to enforce this Agreement. This means that if the franchisee violates the non-compete agreement, the two-year period could be extended.