During the term of the Bee Organized agreement, can a franchisee manage a Competitive Business?
Bee_Organized Franchise · 2025 FDDAnswer from 2025 FDD Document
6.D. RESTRICTIVE COVENANTS: UNFAIR COMPETITION AND IN-TERM NON-COMPETITION OBLIGATIONS
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, during the term of the Franchise Agreement, franchisees are restricted from engaging in activities considered "Prohibited Activities." These activities include owning or having any legal or equitable interest in a Competitive Business, with a limited exception of owning an interest of 3% or less in a publicly traded company that is a Competitive Business. A "Competitive Business" is defined as any business that is the same as or similar to a Bee Organized Business, or one that offers, sells, and/or provides home organization services.
This restriction extends to operating, managing, funding, or performing services for a Competitive Business, whether as an employee, officer, director, manager, consultant, representative, agent, or creditor. Franchisees are also prohibited from diverting or attempting to divert any business or clients from Bee Organized, its affiliates, or other franchisees. Inducing any customer or client of Bee Organized to another business that is not a Bee Organized Business is also forbidden.
These covenants and obligations apply not only to the franchisee but also to the franchisee's owners and spouses, who are required to sign a Franchise Owner and Spouse Agreement and Guaranty. Engaging in any of these prohibited activities would be considered unfair competition and would cause harm to Bee Organized, the System, and other Bee Organized Business franchisees. This comprehensive non-compete clause aims to protect Bee Organized's market position and proprietary information by preventing franchisees from directly competing with the brand during the term of their agreement.