Is there a sample non-compete and non-disclosure agreement included in the Beauty Bungalows FDD?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
| 7. Do you understand that you are bound by the non-compete covenants (both in-term and post-term) listed in your Franchise Agreement and that an injunction is an appropriate remedy to protect the interests of the Beauty Bungalows system if you violate the covenant(s)? Further, do you understand that the term "you" for purposes of the non-compete covenants is defined broadly, such that any actions in violation of the covenants by those holding any interest in the franchisee entity may result in an injunction, default and termination of the Franchise Agreement? |
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15. GENERAL PROVISIONS
15.01 Covenants Not to Compete. During the term of this Agreement and for two (2) years after expiration, earlier termination, or approved Transfer of this Agreement for any reason (and during the term of this Agreement and for two (2) years from the date a person ceases to be an owner, shareholder, member, officer, or director of Franchisee), neither Franchisee nor any of Franchisee's owners, shareholders, members, partners, officers, or directors may participate directly or indirectly or serve in any capacity in any Competitive Business. This covenant not to compete applies: (i) during the term of the Agreement, within any state in which Franchisor or franchisees do business; and after termination of the Agreement within a twenty (20) mile radius from the boundary of Franchisee's Protected Territory, and within a twenty (20) mile radius from any franchised, Franchisor-owned, or affiliated company-owned Beauty Bungalows Studio; (ii) on the Internet; and (iii) on any other Multi-Area Marketing channels used by Franchisor.
Source: Item 22 — CONTRACTS (FDD pages 47–48)
What This Means (2025 FDD)
The 2025 Beauty Bungalows Franchise Disclosure Document does not explicitly state that a sample non-compete and non-disclosure agreement is included. However, the document does reference non-compete covenants within the franchise agreement.
Specifically, franchisees must acknowledge that they are bound by both in-term and post-term non-compete covenants. The FDD states that an injunction is an appropriate remedy to protect Beauty Bungalows' interests if these covenants are violated. The term "you" is broadly defined, meaning that actions violating the covenants by anyone with interest in the franchisee entity could lead to an injunction, default, and termination of the Franchise Agreement.
Item 15.01 outlines the non-compete agreement, stating that during the term of the agreement and for two years after its expiration, termination, or approved transfer, franchisees (or their owners, shareholders, members, etc.) cannot participate in any Competitive Business. This restriction applies within any state where Beauty Bungalows or its franchisees operate. After termination, the restriction applies within a 20-mile radius of the franchisee's Protected Territory and any franchised, franchisor-owned, or affiliated company-owned Beauty Bungalows Studio. The non-compete also extends to the Internet and any multi-area marketing channels used by Beauty Bungalows.
Given the lack of an explicit statement about a sample agreement, prospective franchisees should ask Beauty Bungalows whether a standalone sample non-compete and non-disclosure agreement is available for review, in addition to the terms outlined in the Franchise Agreement.