Does Baya Bar have the right to purchase or affiliate with competitive businesses?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
- 16.1.2 Franchisee agrees that Franchisor has the right, now or in the future, to purchase, merge, acquire or affiliate with an existing competitive or noncompetitive franchise network, chain or any other business regardless of the location of that chain's or business' facilities, and to operate, franchise or license those businesses and/or facilities operating under the Marks or any other marks following Franchisor's purchase, merger, acquisition or affiliation, regardless of the location of the facilities (which Franchisee acknowledges may be within the Territory, proximate thereto, or proximate to any of Franchisee's locations). However, Franchisor represents that it will not convert any such acquired facilities that are operating within the Territory to a Baya Bar franchise during the Term of this Agreement.
- 16.1.3 If Franchisor assigns its rights in this Agreement, nothing herein shall be deemed to require Franchisor to remain in the food and beverage business or to offer or sell any products or services to Franchisee.
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, Baya Bar retains the right to purchase, merge, acquire, or affiliate with existing competitive or noncompetitive franchise networks or any other business. This right extends regardless of the location of the other business's facilities. Baya Bar can operate, franchise, or license these acquired businesses under the Baya Bar brand or any other marks.
However, Baya Bar makes a specific representation that it will not convert any acquired facilities operating within the franchisee's territory into a Baya Bar franchise during the term of the franchise agreement. This provides some territorial protection to the franchisee, ensuring that Baya Bar will not directly compete with them by converting an acquired business within their territory into another Baya Bar location during the agreement term.
This clause also states that if Baya Bar assigns its rights in the agreement, it is not obligated to remain in the food and beverage business or to continue offering or selling any products or services to the franchisee. This could significantly alter the support and resources available to the franchisee if Baya Bar were to be acquired by a company outside of the food and beverage industry.