After the Bevaris Alliance agreement terminates, for how long is a franchisee restricted from being involved with a business in competition with a Restricted Business?

According to the 2024 Bevaris Alliance Franchise Disclosure Document, franchisees face certain restrictions regarding competitive business activities both during the term of the agreement and after its termination or expiration. Specifically, a franchisee is restricted from being involved with any business that competes with a Restricted Business for a period of 24 months following the termination or expiration of the franchise agreement.

This restriction prevents a former Bevaris Alliance franchisee from acting as an agent, consultant, director, employee, owner, partner, or shareholder in any business concern that is in competition with a Restricted Business. A Restricted Business is defined as any business of Bevaris Alliance that is similar to the franchisee's business. This clause aims to protect Bevaris Alliance's business model and market position by preventing franchisees from leveraging their knowledge and experience gained during the franchise term to directly compete with the brand shortly after leaving the system.

However, the agreement also outlines exceptions to these restrictions. A franchisee or individual is not prevented from holding an investment of not more than 5% of the total issued share capital of any company, regardless of whether it is listed on a stock exchange. Additionally, the restrictions do not apply if the franchisee's duties or work relate solely to geographical areas where the business concern does not compete with any Restricted Business, or if their work relates to services or activities they were not materially involved with in the 24 months prior to termination. These exceptions provide some flexibility for franchisees to pursue other business ventures without automatically violating the non-compete terms.

The restrictions apply to the franchisee acting directly or indirectly, and on their own behalf or in conjunction with any firm, company, or person. Each restriction within the clause is intended to be separate and severable, meaning that if one part is deemed void, the remaining restrictions still apply. This comprehensive approach ensures that Bevaris Alliance's interests are protected while allowing franchisees limited scope for alternative business activities under specific conditions.