After the Baya Bar franchise is terminated, what is the geographic restriction on participating in a competing business?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
| Section in Multi | |||
|---|---|---|---|
| Unit Development | |||
| Provision | Agreement | Summary | |
| r. | Non-competition covenants after the franchise is terminated or expires | Section 8.3.2 | For 24 months after the termination of the Franchise Agreement, you may not: divert, or attempt to divert, customers of any Baya Bar outlet (including yours) to any competitor, participate in any capacity, including, but not limited to as an owner, investor, officer, director, employee or agent, in any competing business within five (5) miles of your former Baya Bar outlet location or any other Baya Bar outlet location (franchised or company owned); do any act that could damage the goodwill of the Marks or System, or disrupt or jeopardize our business or that of our franchisees. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 43–52)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, if the Franchise Agreement is terminated, there are post-term non-competition covenants that restrict a franchisee's activities. For a period of 24 months after the termination of the Franchise Agreement, the franchisee is restricted from specific actions.
The franchisee cannot divert or attempt to divert customers of any Baya Bar outlet, including their former outlet, to a competitor. Furthermore, the franchisee is prohibited from participating in any capacity, such as an owner, investor, officer, director, employee, or agent, in any competing business within five miles of their former Baya Bar outlet location or any other Baya Bar outlet location, whether franchised or company-owned.
Additionally, the franchisee is barred from any action that could damage the goodwill of Baya Bar's trademarks or System, or disrupt or jeopardize Baya Bar's business or that of its franchisees. This non-compete agreement is designed to protect Baya Bar's market presence and brand reputation after a franchise relationship ends.