What constitutes a 'Principal' in the context of Baya Bar franchise defaults?

According to the 2024 Baya Bar Franchise Disclosure Document, the term 'Principal' is used throughout the franchise agreement, particularly in the context of obligations and restrictions. However, the document does not explicitly define what constitutes a 'Principal.'

Several clauses within the franchise agreement mention 'Franchisee and each Principal, if any,' indicating that a Principal is a distinct party from the franchisee entity itself. These clauses outline various obligations and restrictions that apply to both the franchisee and any Principals, including non-compete agreements, confidentiality, and adherence to system standards. For instance, both the franchisee and any principals are restricted from engaging in activities that could harm the Baya Bar system or divert business away from it, both during the term of the agreement and for a period of time after termination.

Given the lack of a clear definition in the provided excerpts, it is important for a prospective Baya Bar franchisee to seek clarification from the franchisor regarding who is considered a 'Principal' under the franchise agreement. Understanding the scope of this term is crucial, as it directly impacts the individuals who will be bound by the various obligations and restrictions outlined in the agreement. This information is essential for assessing the full extent of the franchisee's and related parties' responsibilities and potential liabilities.