After the Baya Bar agreement expires, can a Baya Bar Developer divert business from other franchisees to a competitor?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
8.3.2 Upon the expiration or earlier termination of this Agreement or upon a Transfer and continuing for twenty-four (24) months thereafter, Developer shall not, either directly or indirectly, for himself or herself or through, on behalf of or in conjunction with any person or entity (i) divert, or attempt to divert, any business or customer of Developer's Baya Bar outlets 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 retail or café business featuring acai or similarly prepared smoothies or bowls within five (5) miles of the Development Area or any Baya Bar location; 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 developers or franchisees.
8.4 Reasonableness of Restrictions.
Developer acknowledges and agrees that the covenants not to compete set forth in this Agreement are fair and reasonable and will not impose any undue hardship on Developer since Developer has other considerable skills, experience and education which afford Developer the opportunity to derive income from other endeavors.
Source: Item 23 — RECEIPTS (FDD pages 56–189)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, a Baya Bar Developer is restricted from diverting business away from Baya Bar franchisees to a competitor for a period of 24 months after the agreement's expiration or termination. Specifically, the Developer cannot directly or indirectly attempt to divert business or customers from their own Baya Bar outlets or other franchisees within the Baya Bar system to any competitor.
This restriction extends to the Developer's involvement in any competing retail or café business featuring acai or similar smoothies or bowls. The Developer is prohibited from participating as an owner, partner, director, officer, employee, consultant, or agent in such a business within five miles of the Development Area or any Baya Bar location.
Furthermore, the Developer is barred from any action that could harm the goodwill associated with Baya Bar's trademarks and system, or that could interfere with the business of Baya Bar, its developers, or franchisees. Baya Bar also states that these non-compete covenants are considered fair and reasonable, given the Developer's other skills and experience.