Can a Better Blend franchisee provide services to a Competitor during the term of the agreement?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
- (a) Restriction In Term. During the term of this Agreement, neither Franchisee, any Owner, nor any spouse of an Owner (the "Restricted Parties") 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.
- (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, franchisees are restricted from providing services to a competitor during the term of the franchise agreement. The agreement states that the franchisee, any owner, or any spouse of an owner cannot 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 during the term of the agreement. This restriction is in place to protect Better Blend's business interests and maintain the integrity of the brand.
This restriction means that as a Better Blend franchisee, you and certain related parties must avoid any association with competing businesses. This includes not only direct employment but also indirect support through financial assistance or providing services. This covenant not to compete is a standard practice in franchising to prevent franchisees from using the franchisor's confidential information and business model to benefit a competing business.
After the franchise agreement expires or is terminated, a similar restriction applies for two years. During this post-term period, the franchisee and related parties are prohibited from engaging with any competitor within five miles of the franchisee's former territory or any other Better Blend location. This extended restriction ensures that former franchisees do not immediately leverage their experience to compete with the Better Blend system.
If a franchisee fails to comply with these non-compete obligations, the restrictive period will be extended by one day for each day of noncompliance. Better Blend also requires the franchisee's general manager and other key employees to sign confidentiality and non-compete agreements, if requested, further safeguarding the brand's interests.