Can Baya Bar operate businesses under other marks after a purchase, merger, acquisition or affiliation?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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
Source: Item 23 — RECEIPTS (FDD pages 56–189)
What This Means (2024 FDD)
Based on the 2024 Franchise Disclosure Document, Baya Bar franchisees are restricted from engaging in competitive business activities during the term of their agreement. Specifically, unless approved in writing by Baya Bar, franchisees cannot participate in any retail or café business featuring acai or similarly prepared smoothies or bowls. This restriction extends to being an owner, partner, director, officer, employee, consultant, or agent in such a business.
This non-compete agreement also prevents franchisees from diverting business or customers from their Baya Bar outlets or other franchisees within the system. They are prohibited from performing any action that could harm the goodwill associated with the Baya Bar brand or interfere with the business of Baya Bar, its developers, or other franchisees. These restrictions are in place to protect Baya Bar's market position and the integrity of its brand.
After the agreement expires or is terminated, or upon a transfer, the franchisee is still restricted for 24 months. During this period, they cannot participate in a similar retail or café business within five miles of their former Baya Bar location or any other Baya Bar location. This extended non-compete clause ensures that former franchisees do not use the knowledge and experience gained from Baya Bar to directly compete with the franchise shortly after leaving the system.
Baya Bar emphasizes that these non-compete covenants are considered fair and reasonable, given that franchisees possess other skills and experiences that allow them to pursue income from other ventures. The agreement also includes a provision that allows Baya Bar to reduce the scope of these restrictions if they are deemed unreasonable in any proceeding, ensuring the enforceability of the covenants.