Following the termination of the Baya Bar agreement, are franchisees or principals prohibited from attempting to divert customers from other franchisees in the system?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
- 19.5.2 Upon the expiration or earlier termination of this Agreement or upon a Transfer and continuing for twenty-four (24) months thereafter, Franchisee and Principals, if any, shall not, either directly or indirectly, for themselves 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 Franchised Business 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 café or business serving products similar to the System within five (5) miles of the Territory or any Baya Barlocation; 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 franchisees.
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to the 2024 Baya Bar Franchise Disclosure Document, both franchisees and their principals are restricted from diverting or attempting to divert business or customers from other franchisees within the Baya Bar system, even after the franchise agreement terminates. This restriction extends for a period of 24 months following the termination or expiration of the agreement.
Specifically, franchisees and principals are prohibited from diverting or attempting to divert any business or customer of the franchised business or of other franchisees in the Baya Bar system to any competitor through direct or indirect means. They are also barred from participating as an owner, partner, director, officer, employee, consultant, or agent in any cafe or business serving similar products within five miles of the territory or any Baya Bar location.
Additionally, franchisees and principals must not perform any act that could be injurious or prejudicial to the goodwill associated with the Baya Bar marks and system, or interfere with, disturb, disrupt, decrease, or otherwise jeopardize the business of Baya Bar or its franchisees. These post-termination covenants are designed to protect the Baya Bar system and its franchisees from unfair competition by former franchisees and their principals.