During the term of the Better Blend Franchise Agreement, can the Guarantor be employed by a competing business?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
During the term of the Franchise Agreement, 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.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to the 2024 Better Blend Franchise Disclosure Document, the Guarantor is restricted from being employed by a competing business during the term of the Franchise Agreement. Specifically, the Guarantor 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 Franchise Agreement. This restriction is outlined in the Guaranty and Non-Compete Agreement that the Guarantor must sign.
This non-compete obligation extends beyond just employment. It broadly prohibits the Guarantor from having any financial or service-related involvement with a competing business. This is a fairly standard practice in franchising to protect the franchisor's business model and market share. The definition of 'Competitor' is critical here, and a prospective franchisee should fully understand what businesses Better Blend considers to be competitive.
After the Franchise Agreement expires or is terminated, the Guarantor is still subject to certain restrictions. For two years, the Guarantor cannot be involved with any Competitor located within five miles of the franchisee's territory or any other Better Blend business. If the territory hasn't been determined before termination, the non-compete area will be the Site Selection Area. This post-term restriction ensures that the Guarantor cannot immediately leverage inside knowledge to benefit a competing business in close proximity to a Better Blend location.
It's also important to note that these covenants are independent, meaning that any disputes or claims the Guarantor or Franchisee may have against Better Blend do not excuse the Guarantor from complying with these non-compete obligations. If the Guarantor violates these restrictions, the non-compliance period will be added to the restrictive period, further extending the time they must adhere to the non-compete terms.