How does the Bevaris Alliance agreement define the scope of restrictions on the franchisee?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
20. Restrictions
- 20.1 In order to protect the Confidential Information, trade secrets and business connections of the Franchisor and the Franchisor's other franchisees, the Franchisee and the Individual covenant with the Franchisor that they shall not:
- (a) during the Term or for 24 months after termination or expiration of this agreement, solicit or endeavor to entice away from the Franchisor or any other franchisee of the Franchisor the business or custom of a Restricted Customer with a view to providing goods or services to that Restricted Customer in competition with any Restricted Business; or
- (b) during the Term or for 24 months after termination or expiration of this agreement, in the course of any business concern which is in competition with or similar to the Branded Business or any business of the Franchisor or any Restricted Business, offer to employ or engage, or otherwise endeavor to entice away, any employee of the Franchisor or any other franchisee of the Franchisor who could materially damage the interests of the Franchisor or any other franchisee of the Franchisor, and with whom the Franchisee or the Individual dealt in the 24 months prior to termination of this agreement; or
- (c) during the Term, or for 24 months after termination or expiration of this agreement, be involved as agent, consultant, director, employee, owner, partner or shareholder with any business concern which is (or intends to be) in competition with any Restricted Business; or
- (d) during the Term, or for 24 months after termination of this agreement, be involved with the provision of goods or services to (or otherwise have any business dealings with) any Restricted Customer in the course of any business concern which is in competition with any Restricted Business; or
- (e) at any time after termination of this agreement, represent himself as connected, in any way, with the Franchisor.
- 20.2 None of the restrictions in clause 20.1 shall prevent the Franchisee or Individual from:
- (a) holding an investment by way of shares or other securities of not more than 5% of the total issued share capital of any company, whether or not it is listed or dealt in on a recognized stock exchange; or
- (b) being engaged or concerned in any business concern insofar as their duties or work relate solely to geographical areas where the business concern is not in competition with any Restricted Business; or
- (c) being engaged or concerned in any business concern, provided that their duties or work relate solely to services or activities of a kind with which they were not concerned to a material extent in the 24 months prior to termination of this agreement.
- 20.3 The restrictions imposed on the Franchisee and the Individual by this clause 20 apply to them acting:
- (a) directly or indirectly;
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to the 2024 Bevaris Alliance Franchise Disclosure Document, the franchise agreement outlines specific restrictions on franchisees and related individuals to protect the franchisor's confidential information, trade secrets, and business connections. These restrictions apply both during the term of the agreement and for a period of 24 months after its termination or expiration. These restrictions are designed to prevent franchisees from leveraging their knowledge and access gained during the franchise term to unfairly compete with Bevaris Alliance or its other franchisees.
The restrictions include prohibitions against soliciting or enticing away customers of Bevaris Alliance or its other franchisees to provide competing goods or services. Franchisees are also restricted from offering employment to or enticing away employees of Bevaris Alliance or its other franchisees who could materially damage the interests of the franchisor or its franchisees, particularly those with whom the franchisee had dealings in the 24 months prior to termination. Furthermore, franchisees are restricted from being involved with any business concern that competes with Bevaris Alliance's restricted business during the term of the agreement and for 24 months after termination.
However, the agreement provides certain exceptions to these restrictions. Franchisees or related individuals are permitted to hold investments of not more than 5% of the total issued share capital of any company, regardless of whether it competes with Bevaris Alliance. They are also allowed to be engaged in a business concern if their duties relate solely to geographical areas where the business does not compete with any restricted business, or if their duties relate to services or activities they were not materially involved with in the 24 months prior to the termination of the agreement. These exceptions provide some flexibility for franchisees to pursue other business interests without necessarily violating the terms of the franchise agreement. The restrictions apply to the franchisee acting directly or indirectly.
These restrictions are typical in franchise agreements to protect the franchisor's brand, customer base, and proprietary information. Prospective Bevaris Alliance franchisees should carefully review these restrictions to understand the limitations on their activities during and after the franchise term. It is important to consider how these restrictions might impact their future business endeavors and to seek legal counsel if they have any concerns about the scope or enforceability of these provisions.