What constitutes unfair competition by a Bee Organized franchisee during the franchise relationship?
Bee_Organized Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees that during the Term of this Agreement, Franchisee shall not engage in the following activities (the "Prohibited Activities"): (a) owning and/or having any legal or equitable interest whether, as an individual proprietor, owner, partner, member or shareholder of a Corporate Entity, or, in any similar capacity, in a Competitive Business other than, owning an interest of 3% or less in a publicly traded company that is a Competitive Business; (b) operating, managing, funding and/or performing services whether, as an employee, officer, director, manager, consultant, representative, agent, and/or creditor or, in any similar capacity, for or benefitting a Competitive Business; (c) diverting or attempting to divert any business or clients from Franchisor or, one of Franchisor's affiliates or franchisees; (d) inducing any customer or client of Franchisor, Franchisor's affiliates, franchisees of the System, or, of Franchisee, to any other person or business that is not a Bee Organized Business; and/or (e) engaging in any actions, inactions, and/or activities in violation of Articles 6.B. and/or 6.C. of this Agreement (all, individually and collectively, referred to as the "Prohibited Activities"). Franchisee agrees that if Franchisee were to engage in the Prohibited Activities that such actions would be unfair, would constitute unfair competition and would cause harm to Franchisor, the System and other Bee Organized Business franchisees. Franchisee agrees that the foregoing covenants and obligations shall also apply to Franchisee's Owners and Spouses and that Franchisee's Owners and Spouses shall each execute and deliver to Franchisor the Franchise Owner and Spouse Agreement and Guaranty in the form attached to this Agreement as Exhibit 1.
Source: Item 23 — RECEIPTS (FDD pages 54–218)
What This Means (2025 FDD)
According to Bee Organized's 2025 Franchise Disclosure Document, a franchisee commits unfair competition during the term of the agreement by engaging in "Prohibited Activities." These activities include owning more than a 3% interest in a publicly traded company that is a Competitive Business, or having any other legal or equitable interest in a Competitive Business. A Competitive Business is defined as any business that is the same as or similar to a Bee Organized Business, and/or offers, sells, and/or provides home organization services.
Prohibited Activities also encompass operating, managing, funding, or performing services for a Competitive Business as an employee, officer, director, manager, consultant, representative, agent, or creditor. It is also considered unfair competition to divert or attempt to divert any business or clients from the Franchisor, its affiliates, or other franchisees. Inducing any customer or client of Bee Organized, its affiliates, franchisees, or the franchisee themselves to another person or business that is not a Bee Organized Business is also prohibited.
The agreement specifies that engaging in these Prohibited Activities would be unfair, constitute unfair competition, and cause harm to Bee Organized, the System, and other Bee Organized Business franchisees. These restrictions also apply to the franchisee's Owners and Spouses, who are required to sign a Franchise Owner and Spouse Agreement and Guaranty.