Does the Beauty Bungalows franchise agreement specify any geographic limitations on the non-compete clause related to conflicting businesses?
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.
I agree that each of the foregoing covenants shall be construed as independent of any other covenant or provision of this Agreement.
If all or any portion of a covenant in this Agreement is held unreasonable or unenforceable by a court or agency having valid jurisdiction in an unappealed final decision to which the Company is a party, I expressly agree to be bound by any lesser covenant subsumed within the terms of such covenant that imposes the maximum duty permitted by law, as if the resulting covenant were separately stated in and made a part of this Agreement.
I understand and acknowledge that the Company shall have the right, in its sole discretion, to reduce the scope of any covenant set forth in this Agreement, or any portion thereof, without my consent, effective immediately upon receipt by me of written notice thereof; and I agree to comply forthwith with any covenant as so modified.
The Company is a third-party beneficiary of this Agreement and may enforce it, solely and/or jointly with the Franchisee.
Source: Item 23 — RECEIPTS (FDD pages 48–177)
What This Means (2025 FDD)
According to the 2025 Beauty Bungalows Franchise Disclosure Document, the non-compete agreement includes geographic limitations. Specifically, if an individual is 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, they are restricted from involvement in a Competing Business for one year after their employment ends.
The geographic limitations of this non-compete are defined as within a 10-mile radius of the Beauty Bungalows Premises or 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. This restriction also includes a prohibition on involvement in the franchising or licensing of any Competing Business at any location, actions to divert business from the Franchised Business, or soliciting customers or employees of Franchisee for any competitive business purpose during the one-year period.
This agreement also states that each covenant is independent of any other provision, and if any part is deemed unenforceable, the individual agrees to be bound by a lesser covenant that imposes the maximum duty permitted by law. Beauty Bungalows retains the right to reduce the scope of any covenant without consent, effective immediately upon written notice. This agreement benefits Beauty Bungalows as a third party, allowing them to enforce it jointly or solely with the Franchisee.