If a Beauty Bungalows franchisee operates on the Internet, is that considered a competing business after the franchise is terminated or expires?

Question

Accepted Answer

| H | “Cause” defined - non- curable defaults | Section 13.02(b) | Non-curable defaults include misrepresentation by you, failure to complete initial training, bankruptcy, insolvency, or appointment of receiver, abandonment, trademark misuses, unauthorized disclosure, unapproved transfers, or repeated noncompliance. (Termination upon bankruptcy may not be enforceable under U.S. Bankruptcy Law.) |
|---|---|---|---|
| I | Franchisee’s obligations on termination/nonrenewal | Sections 3.07, 13.03, 13.04 | Obligations include complete de- identification, non-competition, return of confidential or critical business information, payment of amounts due, and, upon Franchisor’s election, cooperation regarding assignment of lease. |
| J | Assignment of contract by franchisor | Section 14 | No restriction on our right to assign. |
| K | “Transfer” by franchisee - defined | Sections 1.23, 14.03 | Includes transfer of contract or assets or ownership change. |
| L | Franchisor approval of transfer by franchisee | Sections 14.04-14.08 | We have the right to approve all transfers but will not unreasonably withhold approval. |
| M | Conditions for franchisor approval of transfer | Section 14.04 | Franchise must be open for business to the general public at the Premises, New Franchisee qualifies, Transfer Fee paid, purchase agreement approved, training arranged, general release signed by you, and current agreement signed by new Franchisee. Any brokers’ fees or commissions that arise because of the transfer must be paid by the Franchisee. |
| N | Franchisor’s right of first refusal to acquire franchisee’s Business. | Section 14.09 | We can match any offer for your Business. |
| O | Franchisor’s option to purchase franchisee’s Business | Section 14.09 | We may purchase the Business pursuant to our Right of First Refusal to match any offer for your Business. |
| P | Death or disability of franchisee | Section 14.08 | Franchise must be assigned by estate to approved transferee within 120 days. |
| Q | Non-competition covenants during the term of franchise | Section 15.01 | No involvement in competing business anywhere in U.S. (subject to state law). |
| R | Non-competition covenant after the franchise is terminated or expires | Section 15.01 | No competing business for 2 years within 20 miles from the boundary of your Protected Territory or from another Beauty Bungalows franchise, company-owned Franchise, or on the Internet (including after assignment) (subject to state law). |

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 36–40)

If a Beauty Bungalows franchisee operates on the Internet, is that considered a competing business after the franchise is terminated or expires?

Answer from 2025 FDD Document

What This Means (2025 FDD)

H	“Cause” defined - non- curable defaults	Section 13.02(b)	Non-curable defaults include misrepresentation by you, failure to complete initial training, bankruptcy, insolvency, or appointment of receiver, abandonment, trademark misuses, unauthorized disclosure, unapproved transfers, or repeated noncompliance. (Termination upon bankruptcy may not be enforceable under U.S. Bankruptcy Law.)
I	Franchisee’s obligations on termination/nonrenewal	Sections 3.07, 13.03, 13.04	Obligations include complete de- identification, non-competition, return of confidential or critical business information, payment of amounts due, and, upon Franchisor’s election, cooperation regarding assignment of lease.
J	Assignment of contract by franchisor	Section 14	No restriction on our right to assign.
K	“Transfer” by franchisee - defined	Sections 1.23, 14.03	Includes transfer of contract or assets or ownership change.
L	Franchisor approval of transfer by franchisee	Sections 14.04-14.08	We have the right to approve all transfers but will not unreasonably withhold approval.
M	Conditions for franchisor approval of transfer	Section 14.04	Franchise must be open for business to the general public at the Premises, New Franchisee qualifies, Transfer Fee paid, purchase agreement approved, training arranged, general release signed by you, and current agreement signed by new Franchisee. Any brokers’ fees or commissions that arise because of the transfer must be paid by the Franchisee.
N	Franchisor’s right of first refusal to acquire franchisee’s Business.	Section 14.09	We can match any offer for your Business.
O	Franchisor’s option to purchase franchisee’s Business	Section 14.09	We may purchase the Business pursuant to our Right of First Refusal to match any offer for your Business.
P	Death or disability of franchisee	Section 14.08	Franchise must be assigned by estate to approved transferee within 120 days.
Q	Non-competition covenants during the term of franchise	Section 15.01	No involvement in competing business anywhere in U.S. (subject to state law).
R	Non-competition covenant after the franchise is terminated or expires	Section 15.01	No competing business for 2 years within 20 miles from the boundary of your Protected Territory or from another Beauty Bungalows franchise, company-owned Franchise, or on the Internet (including after assignment) (subject to state law).