What happens to the non-compete period for a Better Blend franchise if there is a Transfer?
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, the non-compete agreement extends for two years after a transfer. This means that if a franchisee transfers their Better Blend franchise to a new owner, the non-compete restrictions apply for two years following the transfer date. This restriction prevents the franchisee, any owner, or any spouse of an owner from engaging in competitive activities within a specific geographic area.
The non-compete clause restricts involvement with any competitor within five miles of the transferred Better Blend franchise's territory or 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 and within five miles of any other Better Blend business operating on the date of termination. For Better Blend businesses without a defined territory, the territory is considered a 3-mile radius for non-compete purposes.
It's important to note that these non-compete covenants are independent of other agreements. If any part of the non-compete clause is deemed unenforceable, the arbitrator or court may modify the restriction to protect Better Blend's business interests. Additionally, any claims the franchisee may have against Better Blend do not serve as a defense against the enforcement of the non-compete agreement. Non-compliance with the non-compete obligations during the restrictive period will result in an extension of the period by one day for each day of non-compliance.