Is there any exception to the non-competition covenants for a Baya Bar developer?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
ning, 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.
Source: Item 23 — RECEIPTS (FDD pages 56–189)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, there is an exception to the non-competition covenants if the franchisor approves it in writing. During the term of the Development Agreement, the developer cannot engage in any competitive business activities, such as participating in a retail or café business featuring acai or similarly prepared smoothies or bowls, or disrupt the Baya Bar system, unless Baya Bar gives written approval.
After the agreement expires or terminates, the developer is restricted from similar competitive actions for 24 months within a five-mile radius of the Development Area or any Baya Bar location. These restrictions include diverting customers, participating in competing businesses, or acting in ways that harm the Baya Bar brand.
The FDD also states that Baya Bar has the right to reduce the scope of any covenant set forth in Article 8, which includes the non-competition agreements. This can be done without the developer's consent, and it becomes effective immediately once the developer receives written notice. If any of the non-compete terms are deemed unreasonable, they will be adjusted to be enforceable.