For Better Blend, what is the geographic scope of the non-compete restriction after a transfer by the Guarantor?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
- (b) Restriction Post Term.
For two years after the Franchise Agreement expires or is terminated for any reason (or, if applicable, for two years after a Transfer by Guarantor), Guarantor shall not 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 located 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 the Franchise Agreement is terminated before the Territory is determined, then the area of non-competition will be the Site Selection Area and within five miles the 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.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, the Guarantor is subject to a post-term non-compete restriction for two years after a transfer. This restriction prevents the Guarantor from having any involvement with a Competitor within five miles of the Better Blend franchise's territory. It also applies within five miles of any other Better Blend business operating on the date of the transfer.
If the Franchise Agreement is terminated before the territory is determined, the non-compete area will be the Site Selection Area. It also includes a five-mile radius around any other Better Blend business operating at the time of termination. If a Better Blend business does not have a defined territory, its territory is considered a 3-mile radius for non-compete purposes.
This means that a Guarantor who transfers their interest in a Better Blend franchise must avoid any competitive business activity within these specified zones for the two-year period. This restriction aims to protect Better Blend's market and goodwill by preventing those with inside knowledge of the franchise from directly competing nearby.