Does the non-competition agreement apply to the spouse of a Bee Organized franchisee owner?
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, the non-competition agreement does apply to the spouse of a Bee Organized franchisee owner. During the term of the agreement, the franchisee agrees not to engage in any prohibited activities, such as owning or operating a competitive business. These restrictions also apply to the franchisee's owners and spouses.
Bee Organized requires that the franchisee's owners and spouses each execute and deliver a Franchise Owner and Spouse Agreement and Guaranty. This agreement likely outlines the specific terms and conditions of the non-competition obligations for spouses. Spouses are also subject to non-competition covenants outlined in Article 4 of the agreement. If there is a proposed transfer of equity or ownership interests, failure to notify Bee Organized or obtain their consent will result in the spouse remaining subject to these covenants, irrespective of the transfer.
After the franchise relationship ends, the franchisee and their owners and spouses are still subject to non-competition restrictions during the post-term restricted period. These restrictions prevent them from engaging in prohibited activities, especially concerning competitive businesses within a restricted territory. If a franchisee engages in prohibited activities during this period, the restricted period will be extended by the duration of the prohibited activity. This ensures that Bee Organized can protect its business interests and maintain a competitive edge in the market.