Does the Baya Bar agreement acknowledge that franchisees and principals have other skills that allow them to derive income from other endeavors?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
19.5.1 During the term of this Agreement, Franchisee and each Principal, if any, shall not, either directly or indirectly, for themselves or through, on behalf of, or in conjunction with, any person or entity (i) divert, or attempt to divert, any business or customer of the Franchised Business or of other franchisees in the System to any competitor, by direct or indirect inducement or otherwise; (ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in any café or business serving products similar to the System; or (iii) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System or (iv) in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize the business of the Franchisor or any Baya Bar franchisees or Franchisor-affiliated outlets.
19.5.2 Upon the expiration or earlier termination of this Agreement or upon a Transfer and continuing for twenty-four (24) months thereafter, Franchisee and Principals, if any, shall not, either directly or indirectly, for themselves or through, on behalf of or in conjunction with any person or entity (i) divert, or attempt to divert, any business or customer of the Franchised Business or of other franchisees in the System to any competitor, by direct or indirect inducement or otherwise; or (ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in any café or business serving products similar to the System within five (5) miles of the Territory or any Baya Barlocation; or (iii) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System or (iv) in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize the business of the Franchisor or any Baya Bar franchisees.
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, the franchise agreement does not explicitly acknowledge that franchisees and principals can derive income from other endeavors. However, the agreement does place restrictions on activities that could conflict with the Baya Bar business.
Specifically, during the term of the agreement, franchisees and principals are prohibited from engaging in any business or activity that could divert customers or harm the goodwill associated with the Baya Bar brand. This includes participating in any capacity in a café or business serving similar products to Baya Bar. After the agreement expires or terminates, these restrictions continue for 24 months within a 5-mile radius of the Baya Bar location or any other Baya Bar location.
These non-compete clauses suggest that while the agreement doesn't expressly forbid outside income, it heavily restricts involvement in competitive businesses, especially during the franchise term and for a period afterward. A prospective franchisee should carefully consider these restrictions and how they might impact other potential income sources or business ventures.