After the Baya Bar agreement expires, for how long is the Developer restricted from competing?
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.
Source: Item 23 — RECEIPTS (FDD pages 56–189)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, a Developer faces certain restrictions after the expiration or termination of their agreement. Specifically, for a period of twenty-four (24) months following the end of the agreement, the Developer is restricted from engaging in activities that could harm Baya Bar's business.
This includes directly or indirectly diverting or attempting to divert customers to competitors, participating in any retail or café business featuring acai or similar products within five (5) miles of the Development Area or any Baya Bar location, and performing any action that could be harmful to the goodwill associated with Baya Bar's trademarks and system. The Developer is also prohibited from interfering with the business of the Franchisor or any Baya Bar developers or franchisees.
The agreement states that these non-compete covenants are considered fair and reasonable, given the Developer's other skills and opportunities for income. However, if any of these restrictions are deemed unreasonable in any legal proceeding, the time period or geographic scope may be reduced to what is considered reasonable. Baya Bar also retains the right to reduce the scope of any covenant at its discretion with written notice to the Developer.
Baya Bar emphasizes that violating these non-compete agreements would cause immediate and irreparable harm to the company, entitling Baya Bar to seek injunctive relief to prevent any such violations. The existence of any claims the Developer may have against Baya Bar does not serve as a defense against the enforcement of these covenants.