Does Baya Bar have the right to modify the non-competition covenants?
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.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 42–43)
What This Means (2024 FDD)
Based on the 2024 Franchise Disclosure Document, Baya Bar's non-competition covenants state that as a franchisee, you acknowledge that the specialized training, trade secrets, and confidential information you receive provide a competitive advantage in developing and operating your Baya Bar outlet. Because access to this specialized knowledge is a primary reason for entering into the franchise agreement, you agree to certain non-compete conditions.
During the term of the agreement, unless otherwise approved in writing by Baya Bar, you are prohibited from diverting business or customers to competitors, participating in any retail or café business featuring acai or similar products, or performing any act that could harm the goodwill associated with the Baya Bar brand. You also cannot interfere with the business of the franchisor or other Baya Bar franchisees.
The FDD does not explicitly state whether Baya Bar has the right to modify these non-competition covenants unilaterally. A prospective franchisee should seek clarification from the franchisor regarding any potential modifications to the non-competition covenants during the term of the agreement.