Are the spouses of Better Blend franchise owners required to sign a personal guaranty?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in franchise | |
|---|---|---|
| or other agreement | ||
| q. Non-competition | ||
| covenants during the term | ||
| of the franchise | spouse of an owner may have ownership interest in, lend money or provide financial assistance to, provide services to, or be employed by, any competitor. | |
| r. Non-competition | ||
| covenants after the | ||
| franchise is terminated or | ||
| expires | business, or any spouse of an owner may have ownership interest in, lend money or provide financial assistance to, provide services to, or be employed by a competitor located within five miles of your former territory (or of your site selection area if no territory had been set) or of the territory of any other Better Blend business operating on the date of termination or expiration. |
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 32–33)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, spouses of owners may be impacted by non-compete covenants. Specifically, Item 17 outlines non-competition covenants during the term of the franchise, stating that neither the franchisee, any owner of the business, nor any spouse of an owner may have ownership interest in, lend money or provide financial assistance to, provide services to, or be employed by, any competitor.
Additionally, the FDD states that for two years after the franchise is terminated or expires, these same restrictions apply to the franchisee, any owner of the business, and any spouse of an owner. They are prohibited from having ownership interest in, lending money or providing financial assistance to, providing services to, or being employed by a competitor located within five miles of the former territory or site selection area.
While the FDD does not explicitly state that spouses must sign a personal guaranty, the non-compete covenants directly impact spouses of owners, potentially limiting their business and employment opportunities during the franchise term and for two years after termination or expiration. A prospective franchisee should seek clarification from Better Blend regarding the specific obligations and restrictions placed on spouses of franchise owners.