What are the consequences if a Baya Bar Developer fails to comply with the non-disclosure and non-competition covenants in Article 8?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
7.2.8 fails to comply with the non-disclosure and non-competition covenants in Article 8 hereof:
7.3 Curable Defaults.
Developer shall be deemed to be in material default and Franchisor may, at its option, terminate this Agreement and all rights granted hereunder, if Developer fails to cure the default within the time period set forth in this Section 7.3, effective immediately upon notice to Developer, if Developer:
- 8.6 Injunctive Relief. Developer acknowledges that a violation of the covenants not to compete contained in this Agreement would result in immediate and irreparable injury to Franchisor for which no adequate remedy at law will be available. Accordingly, Developer hereby consents to the entry of an injunction prohibiting any conduct by Developer in violation of the terms of the covenants not to compete set forth in this Agreement.
- 8.7 No Defense. Developer expressly agrees that the existence of any claims he or she may have against Franchisor, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by Franchisor of the covenants in this Section.
- 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
reduced by such number of months or the geographic scope will be reduced by the elimination of such portion thereof, or both, so that such restrictions may be enforced for such time and scope as are adjudged to be reasonable. In addition, Franchisor shall have the right, in its sole discretion, to reduce the scope of any covenant set forth in this Article 8 or any portion thereof, without Developer's consent, effective immediately upon receipt by Developer of written notice thereof, and Developer agrees to forthwith comply with any covenant as so modified.
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's failure to comply with the non-disclosure and non-competition agreements outlined in Article 8 constitutes a material default of the Development Agreement. This gives Baya Bar Franchise Systems, LLC the option to terminate the agreement and all rights granted to the Developer.
Baya Bar developers acknowledge that violating the non-compete covenants would cause immediate and irreparable harm to Baya Bar, for which monetary compensation would not be adequate. Consequently, developers consent to a court injunction that would prohibit any actions violating the non-compete terms. Developers also agree that any claims they may have against Baya Bar will not serve as a defense if Baya Bar tries to enforce these covenants.
These restrictions are considered reasonable because the developer has other skills and experience to earn income from other sources. If any restriction is deemed unreasonable, its scope will be reduced to what is considered reasonable. Baya Bar also has the right to reduce the scope of any covenant in Article 8 with written notice to the developer, who must then comply with the modified covenant immediately.