During the term of the Better Blend Franchise Agreement, can the Guarantor be employed by a Competitor?

According to Better Blend's 2024 Franchise Disclosure Document, the Guarantor is restricted from being employed by a competitor 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 part of the Guaranty and Non-Compete Agreement that the Guarantor executes in favor of Better Blend Franchising, LLC.

This non-compete provision extends beyond just employment. It broadly prohibits the Guarantor from having any financial or service-related involvement with a competing business. This is designed to protect Better Blend's market position and confidential information by preventing individuals with close ties to the franchise from supporting rival businesses. The definition of 'Competitor' is important here, and a prospective franchisee should fully understand what businesses are considered competitive to Better Blend.

After the Franchise Agreement expires or is terminated, the Guarantor is still restricted from involvement with a Competitor for a period of two years. This post-term restriction applies within five miles of the franchisee's territory or within five miles of any other Better Blend business operating on the date of expiration, termination, or transfer. If the territory hasn't been determined before termination, the non-compete area will be the Site Selection Area. These restrictions are typical in franchising to protect the brand and prevent franchisees or related parties from immediately using their gained knowledge to benefit a competing business nearby.

It's also important to note that these covenants are independent, meaning that if any part of the non-compete agreement is deemed unenforceable, the parties intend for a court or arbitrator to modify the restriction to protect Better Blend's legitimate business interests. Furthermore, any claim the Guarantor or franchisee may have against Better Blend does not constitute a defense against the enforcement of these covenants. Non-compliance with these obligations during the restrictive period will extend the period by an additional day for each day of noncompliance.