Does the Beauty Bungalows franchise agreement specify any geographic limitations on the non-compete clause?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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.
Source: Item 23 — RECEIPTS (FDD pages 48–177)
What This Means (2025 FDD)
According to the 2025 Beauty Bungalows FDD, the post-term restrictive covenant for a manager of the Franchised Business, or an officer/director/manager/partner of Franchisee includes geographic limitations. Specifically, such individuals agree not to be involved in a Competing Business for one year after the termination of their employment with the Franchisee.
The geographic limitation of this non-compete agreement includes being restricted (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 their employment with Franchisee ceases through the date of their involvement with the Competing Business.
In addition to the geographic limitations, the agreement also states that individuals 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 their employment with the Franchisee.