Is the post-term non-compete period for a Bee Organized franchise tolled during periods of non-compliance?
Bee_Organized Franchise · 2025 FDDAnswer from 2025 FDD Document
sonally guarantee your obligations to us under the Franchise Agreement. You must also promise in writing that, among other things, during the term of the Franchise Agreement you will not participate in any business that in any way competes with a Bee Organized Business, and that for 24 months after the expiration or termination of the Franchise Agreement with said period being tolled during any periods of non-compliance, you will not participate in any competitive business located within and/or servicing clients located within your Operating Territory and a 25 mile radius surrounding your Operating Territory. Further you will not participate in any competitive business located within and/or servicing clients located within the operating territory of any other Bee Organized Business. Your managers will be required by us to sign a confidentiality agreement.
ITEM 16 RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL
You may only sell the products and services specified or approved by us in writing. You must sell the products and services required by us. We can change the products and services that you must offer. There is no limitation on our right to change the products and services offered by Franchised Business. You are not limited to whom you may sell your products and services, provided you do so exclusively from within your Operating Territory and to/on behalf of clients that are located within your Operating Territory and in compliance with the standards we have determined for the System.
ITEM 17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION
THE FRANCHISE RELATIONSHIP
This table lists certain important provisions of the franchise and related agreements. You should read these provisions in the agreements attached to this Disclosure Document.
| v. Choice of forum | 18.G. | All mediation, arbitration and, if applicable, litigation proceedings must be conducted in, or closest to, State court of general jurisdiction that is within or closest to Johnson County, Kansas or, if appropriate, the United States District Court nearest to our corporate headquarters at the time such action is filed. This provision is subject to applicable state law. |
|---|---|---|
| w. Choice of law | 18.F. | Kansas law will govern. |
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 34–35)
What This Means (2025 FDD)
According to Bee Organized's 2025 Franchise Disclosure Document, the post-term non-compete period is tolled during periods of non-compliance. Specifically, the Franchise Agreement states that for 24 months after the expiration or termination of the agreement, with said period being tolled during any periods of non-compliance, the franchisee will not participate in any competitive business within their Operating Territory and a 25-mile radius, or within the operating territory of any other Bee Organized Business. This means that if a franchisee violates the non-compete agreement, the 24-month period is paused for the duration of the violation.
This tolling provision is significant because it protects Bee Organized from unfair competition by franchisees who breach the agreement. If a franchisee violates the non-compete terms, Bee Organized can extend the restricted period, ensuring continued protection. This provision applies not only to the franchisee but also to their Owners and Spouses, who must also sign a Franchise Owner and Spouse Agreement and Guaranty.
Furthermore, the FDD states that if a franchisee engages in prohibited activities during the post-term restricted period, that period will be extended by the amount of time the franchisee was engaging in the prohibited activity. This extension does not waive Bee Organized's rights regarding the breach. The agreement also specifies that engaging in prohibited activities constitutes unfair competition, causing irreparable harm to Bee Organized and its System.
In summary, the tolling of the non-compete period provides Bee Organized with a mechanism to safeguard its business interests and maintain a competitive advantage by preventing former franchisees from engaging in activities that could harm the brand or other franchisees within the Bee Organized system.