During the term of the Baya Bar agreement, can a Developer participate in a retail business featuring acai?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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 23 — RECEIPTS (FDD pages 56–189)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, during the term of the agreement, a Developer is restricted from participating in a retail or café business featuring acai or similarly prepared smoothies or bowls. Specifically, the Developer cannot act as an owner, partner, director, officer, employee, consultant, or agent in such a business. This restriction applies unless Baya Bar provides written approval otherwise.
This non-compete clause ensures that the Developer remains fully committed to the Baya Bar franchise and does not divert business or customers to competitors. It protects Baya Bar's market position and the confidential information and training provided to the Developer. The FDD emphasizes that the Developer receives valuable training, trade secrets, and confidential information that provide a competitive advantage in operating Baya Bar outlets, making this restriction a key part of the agreement.
The Developer acknowledges that they will receive specialized training, trade secrets, and confidential information that provide a competitive advantage. This acknowledgment reinforces the reasonableness of the non-compete covenants, as the Developer's access to this proprietary information is a primary reason for entering the agreement. This clause aims to prevent the Developer from using Baya Bar's resources and knowledge to benefit a competing business during the term of the agreement.