factual

Is a Baya Bar developer allowed to decrease the business of any Baya Bar developers?

Baya_Bar Franchise · 2024 FDD

Answer from 2024 FDD Document

ding upon Developer.

  • 8.2 Protection of Information. Developer shall take all steps necessary, at Developer's own expense, to protect the Confidential Information and shall immediately notify Franchisor

  • if Developer finds that any Confidential Information has been divulged in violation of this Agreement.
  • 8.3 Noncompetition Covenants. Developer acknowledges that, pursuant to this Agreement, Developer will receive valuable training, trade secrets and Confidential Information of the System that are beyond the present knowledge, training and experience of Developer. Developer acknowledges that such specialized training, trade secrets and Confidential Information provide a competitive advantage and will be valuable to him or her in the development and operation of Baya Bar outlets, and that gaining access to such specialized training, trade secrets and Confidential Information is, therefore, a primary reason why Developer is entering into this Agreement. In consideration for such specialized training, trade secrets, Confidential Information and rights, Developer covenants that, except as otherwise approved in writing by Franchisor:
    • 8.3.1 During the term of this Agreement, 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 the Developer's Baya Bar outlets or of other developers or franchisees in the System to any competitor, by direct or indirect inducement or otherwise; (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; 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 or Franchisor-affiliated outlets.
    • 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

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.

Source: Item 23 — RECEIPTS (FDD pages 56–189)

What This Means (2024 FDD)

According to Baya Bar's 2024 Franchise Disclosure Document, a developer is restricted from actions that could harm the business of other Baya Bar developers or franchisees. Specifically, during the term of the agreement, a developer cannot directly or indirectly interfere with, disturb, disrupt, decrease, or otherwise jeopardize the business of the franchisor, other Baya Bar developers or franchisees, or franchisor-affiliated outlets. This restriction is in place to protect the goodwill associated with the Baya Bar brand and the overall system.

This provision aims to prevent franchisees from engaging in activities that could unfairly take business away from other franchisees within the Baya Bar system. This includes actions like diverting customers to competitors or engaging in practices that undermine the brand's reputation. The non-competition covenant acknowledges that developers receive valuable training, trade secrets, and confidential information that provide a competitive advantage, making it essential to protect the system from internal harm.

After the agreement expires or terminates, the developer is restricted for twenty-four (24) months from diverting business or customers to competitors, participating in similar businesses within five (5) miles of the Development Area or any Baya Bar location, or performing any act injurious to the goodwill associated with the Baya Bar brand. These restrictions are considered fair and reasonable because the developer has other skills and experience to derive income from other endeavors.

Baya Bar also has the right to seek injunctive relief if a developer violates these non-competition agreements, acknowledging that such violations would cause immediate and irreparable harm. This means Baya Bar can obtain a court order to stop the developer from continuing the harmful behavior. The developer's potential claims against Baya Bar do not serve as a defense against the enforcement of these covenants.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.