After the Better Blend Agreement terminates, what is the geographic restriction for Restricted Parties regarding involvement with a Competitor of Better Blend?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
- (b) Restriction Post Term. For two years after this Agreement expires or is terminated for any reason (or, if applicable, for two years after a Transfer), no Restricted Party shall directly or indirectly have any ownership interest in, lend money or provide financial assistance to, provide any services to, or be employed by, any Competitor within five miles of Franchisee's Territory or within five miles of the territory of any other Better Blend business operating on the date of expiration, termination, or transfer, as applicable. If this Agreement is terminated before the Territory is determined, then the area of non-competition will be the Site Selection Area and within five miles territory of any other Better Blend business operating on the date of termination. If a given Better Blend business does not have a defined territory, then for purposes of this Section its territory will be deemed to be a 3-mile radius.
- (c) Interpretation. The parties agree that each of the foregoing covenants is independent of any other covenant or provision of this Agreement. If all or any portion of the covenants in this Section is held to be unenforceable or unreasonable by any arbitrator or court, then the parties intend that the arbitrator or court modify such restriction to the extent reasonably necessary to protect the legitimate business interests of BBF. Franchisee agrees that the existence of any claim it may have against BBF shall not constitute a defense to the enforcement by BBF of the covenants of this Section. If a Restricted Party fails to comply with the obligations under this Section during the restrictive period, then the restrictive period will be extended an additional day for each day of noncompliance.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, following the termination or expiration of the Franchise Agreement, certain restrictions apply to the franchisee, any owner, or any spouse of an owner (referred to as "Restricted Parties") regarding involvement with a competitor. Specifically, for two years after the agreement ends, these Restricted Parties are prohibited from having any ownership interest in, lending money or providing financial assistance to, providing services to, or being employed by any competitor. This restriction is limited to a geographic area within five miles of the franchisee's territory or within five miles of any other Better Blend business operating at the time of termination or expiration.
If the Better Blend Franchise Agreement is terminated before the territory is determined, the non-compete area will be the Site Selection Area and within a five-mile radius of any other Better Blend business operating on the date of termination. Furthermore, if a Better Blend business does not have a defined territory, its territory will be considered a 3-mile radius for the purposes of this non-compete clause.
These non-compete covenants are independent of other agreements. Should any part of these restrictions be deemed unenforceable, it is intended that the arbitrator or court will modify the restriction to protect Better Blend's business interests. Non-compliance with these obligations during the restrictive period will extend the period by one day for each day of non-compliance, which means that any violation of the non-compete agreement will result in a longer period of restriction.