Does the Beauty Bungalows franchise agreement specify any financial thresholds related to owning a conflicting business?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
s, hair loss treatments services and hair treatment services and other similar personal services. (collectively, a "Competing Business"). I also agree that I will not undertake any action to divert business from the Franchised Business to any Competing Business or solicit any of the former customers or employees of Franchisee for any competitive business purpose.
- 7.1 Post-Term Restrictive Covenant for Controlling Person of Franchised Business or Manager/Officers/Directors of Franchisee. In the event I am a manager of the Franchised Business, or an officer/director/manager/partner of Franchisee that has not already executed a personal guaranty agreeing to be bound by the terms of the Franchise Agreement, then I further agree that I will not be involved in a Competing Business of any kind for a period of one year after the expiration or termination of my employment with Franchisee for any reason: (i) at or within a 10-mile radius of the Premises; or (ii) within a 10-mile radius of any other Beauty Bungalows business that exists at the time my employment with Franchisee ceases through the date of my involvement with the Competing Business. I also agree that I will not be involved in the franchising or licensing of any Competing Business at any location or undertake any action to divert business from the Franchised Business to any Competing Business or solicit any of the former customers or employees of Franchisee for any competitive business purpose, during this one-year period following the termination or expiration of my employment with the Franchisee.
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Source: Item 23 — RECEIPTS (FDD pages 48–177)
What This Means (2025 FDD)
The 2025 Beauty Bungalows Franchise Disclosure Document does not specify any financial thresholds related to owning a conflicting business. However, the document does include a sample confidentiality and restrictive covenant agreement that trained employees, officers, directors, general partners, members, Operating Principal(s), Key Manager(s), and any other management personnel of the franchisee must adhere to.
Specifically, if an individual is a manager of the franchised business, or an officer/director/manager/partner of the franchisee that has not already executed a personal guaranty agreeing to be bound by the terms of the Franchise Agreement, they agree not to be involved in a Competing Business of any kind for one year after the termination of their employment with the Beauty Bungalows franchisee. This restriction applies within a 10-mile radius of the Beauty Bungalows premises or any other Beauty Bungalows business that exists at the time their employment ceases.
Additionally, these individuals agree not to be involved in the franchising or licensing of any Competing Business at any location, nor can they undertake any action to divert business from the Beauty Bungalows franchise to any Competing Business or solicit any of the former customers or employees of the Beauty Bungalows franchisee for any competitive business purpose during this one-year period. This agreement also states that Beauty Bungalows has the right to reduce the scope of any covenant set forth in this agreement without consent, effective immediately upon written notice.