After the Baya Bar agreement expires, what is the geographic limit of the non-compete restriction for a Baya Bar Developer?
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.
- 8.5 Reduction of Time or Scope.
If the period of time or the geographic scope specified above, should be adjudged unreasonable in any proceeding, then the period of time will be
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 faces certain non-compete restrictions following the expiration or termination of their agreement. Specifically, for a period of 24 months after the agreement ends, the Developer cannot participate in any retail or café business featuring acai or similarly prepared smoothies or bowls within a 5-mile radius of the Development Area or any Baya Bar location.
This restriction prevents the Developer from directly or indirectly diverting business away from existing Baya Bar outlets or other franchisees within the system. It also prohibits them from engaging in activities that could harm the goodwill associated with the Baya Bar brand and system. The non-compete clause aims to protect Baya Bar's market presence and the investments made by its franchisees.
The agreement also states that the Developer acknowledges the reasonableness of these restrictions, considering their other skills, experience, and education that allow them to pursue income from other sources. However, if any court deems the time period or geographic scope unreasonable, the agreement allows for a reduction in either the time or scope to make the restrictions enforceable. Baya Bar also retains the right to reduce the scope of the non-compete at its discretion with written notice to the Developer.
This non-compete agreement is a standard practice in franchising to protect the brand and other franchisees. Prospective Baya Bar Developers should carefully consider these restrictions and how they might impact their future business opportunities after their agreement with Baya Bar concludes.