For Baya Bar, do the Developer's obligations survive termination, expiration, or transfer of the franchise agreement if the obligations contemplate performance after such termination, expiration, or transfer?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
11.10 Survival. Any obligation of Developer that contemplates performance of such obligation after termination, expiration or transfer of this Agreement shall be deemed to survive such termination, expiration or transfer.
8.1 Confidential Information. Developer acknowledges and accepts that during the term of this Agreement, Developer will have access to Franchisor's trade secrets, including, but not limited to, recipes, methods, processes, customer lists, vendor partnerships and/or relationships, sales and technical information, financial information, costs, product prices and names, software tools and applications, website and/or email design, products, services, equipment, technologies and procedures relating to the operation of the Franchised Business; the Manual; methods of advertising and promotion; instructional materials; any other information which Franchisor may or may not specifically designate as "confidential" or "proprietary"; and the components of the System, whether or not such information is protected or protectable by patent, copyright, trade secret or other proprietary rights (collectively referred to herein as the "Confidential Information"). Developer shall not, during the term of this Agreement and thereafter, communicate or divulge to, or use for the benefit of, any other person or entity, and, following the expiration or termination of this Agreement, shall not use for Developer's own benefit, any Confidential Information that may be communicated to Developer or of which Developer may be apprised in connection with the development of Baya Bar outlets under the terms of this Agreement. Developer shall not at any time copy, duplicate, record or otherwise reproduce any Confidential Information, in whole or in part, or otherwise make the same available to any person, without Franchisor's prior written consent. The covenant in this Section 8.1 shall survive the expiration, termination or transfer of this Agreement or any interest herein and shall be perpetually binding upon Developer.
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, any obligation of the Developer that requires performance after the termination, expiration, or transfer of the agreement will survive such termination, expiration, or transfer. This means that even after the agreement ends, certain responsibilities of the Developer continue.
Specifically, the Developer is bound by non-disclosure and non-competition covenants. The non-disclosure covenant ensures that confidential information acquired during the agreement term, such as recipes, methods, customer lists, and financial data, remains protected. The Developer cannot disclose or use this information for their own or another's benefit, even after the agreement's termination, expiration, or transfer. This obligation is perpetual.
Additionally, the Developer is subject to non-competition covenants for twenty-four (24) months after the agreement ends. During this period, the Developer cannot engage in any retail or café business featuring acai or similar smoothies or bowls within five (5) miles of the Development Area or any Baya Bar location. They are also prohibited from diverting business from Baya Bar outlets or interfering with the goodwill associated with the Baya Bar brand. These restrictions are designed to protect Baya Bar's market position and confidential information even after the Developer's formal association with the franchise has ended.