What is the requirement for the individual capacity of the franchisee regarding brand protection, noncompetition, and financial obligations to Bee Organized?
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.
Franchisee must conspicuously identify itself at the premises of the Franchised Business and in all dealings with clients, lessors, contractors, suppliers, public officials and others as the owner of a Bee Organized Business under a franchise from Franchisor, and Franchisee must place other notices of independent ownership on signs, forms, stationery, advertising and other materials as Franchisor requires.
Franchisee must not employ any Licensed Mark in signing any contract, lease, mortgage, check, purchase agreement, negotiable instrument, or other legal obligation. Franchisee must not employ any Licensed Mark in a manner that is likely to result in liability of Franchisor for any indebtedness, action, inaction, or obligation of Franchisee.
Franchisor and Franchisee shall not make any express or implied agreements, guaranties or representations, or incur any debt, in the name, or on behalf, of the other. Franchisor and Franchisee shall not represent that their relationship is anything other than franchisor and franchisee. Franchisor and Franchisee shall not be obligated by, or have any liability under, any agreements or representations made by the other that are not expressly authorized. Franchisor shall not be obligated for any damages to any person or property directly or indirectly arising out of the operation of the Franchised Business, whether or not caused by Franchisee's negligent, willful act or failure to act.
- (1) If Franchisee is an individual and not a Corporate Entity, upon the death or permanent disability of Franchisee, the executor, administrator, conservator or other personal representative of Franchisee, must appoint a manager that meets the equivalent of an Operating Manager within a reasonable time, which shall not exceed 30 days from the date of death or permanent disability. The appointed manager (as applicable) must serve and qualify as an Operating Manager and attend and successfully complete the Training Program within 60 days of the appointment. If Franchisee's Bee Organized Business is not being managed by a Franchisor approved Operating Manager (as applicable) within 30 days after such death or permanent disability, Franchisor is authorized, but is not required, to immediately appoint a manager to maintain the operations of Franchisee's Bee Organized Business for, and on behalf of, Franchisee at Franchisee's sole costs until an approved Operating Manager is able to assume the management and operation of Franchisee's Bee Organized Business. Franchisor's appointment of a manager for Franchisee's Bee Organized Business does not relieve Franchisee of its obligations under this Agreement, including this Article 14.D., or constitute a waiver of Franchisor's right to terminate this Agreement pursuant to Article 16, below. At all times, including while Franchisee's Bee Organized Business may be managed by Franchisor's appointed manager, Franchisor shall not be liable for any debts, losses, costs, or expenses incurred in the operations of Franchisee's Bee Organized Business or to any creditor of Franchisee for any products, materials, supplies or services purchased by Franchisee's Bee Organized Business. Franchisor has the right to charge a reasonable fee (the "Management Service Fees") for such management services and may cease to provide management services at any time.
Source: Item 23 — RECEIPTS (FDD pages 54–218)
What This Means (2025 FDD)
According to Bee Organized's 2025 Franchise Disclosure Document, franchisees face several requirements to protect the brand, adhere to non-competition agreements, and meet financial obligations. During the term of the Franchise Agreement, franchisees are prohibited from engaging in activities such as owning or having a legal or equitable interest in a Competitive Business, with a limited exception of owning 3% or less in a publicly traded company that is a Competitive Business. Franchisees are also restricted from operating, managing, funding, or performing services for a Competitive Business, diverting business or clients from Bee Organized, or inducing customers to other businesses not affiliated with Bee Organized. These restrictions also apply to the franchisee's Owners and Spouses, who must sign a Franchise Owner and Spouse Agreement and Guaranty.
Bee Organized also emphasizes the importance of its Reasonable Business Judgment, which allows the franchisor to make decisions that benefit the overall system, even if those decisions do not directly benefit individual franchisees. Franchisees must identify themselves as owners of a Bee Organized franchise in all business dealings and must not use the Licensed Marks in any way that could create liability for the franchisor. Franchisees are responsible for their own debts, taxes, and obligations and cannot make agreements or representations on behalf of Bee Organized without express authorization.
If a franchisee is an individual and not a Corporate Entity, in the event of the franchisee's death or permanent disability, their representative must appoint a manager meeting the standards of an Operating Manager within 30 days. This manager must complete the Training Program within 60 days of appointment. If a Franchisor approved Operating Manager is not managing the Bee Organized Business within 30 days, Bee Organized is authorized to appoint a manager at the franchisee's expense. This appointment does not relieve the franchisee of their obligations or waive Bee Organized's right to terminate the agreement. Bee Organized is not liable for any debts, losses, costs, or expenses incurred during the operation of the franchisee's business, even if managed by Bee Organized's appointed manager, and can charge a reasonable fee for management services.