Can a Bevaris Alliance franchisee be involved as a consultant with a business that intends to compete with a Restricted Business during the term of the agreement?
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:
- (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
- 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; and
- (b) on their own behalf or on behalf of, or in conjunction with, any firm, company or person.
- 20.4 Each of the restrictions in this clause 20 is intended to be separate and severable. If any of the restrictions are held to be void but would be valid if part of their wording were deleted, such restriction shall apply with such deletion as may be necessary to make it valid or effective.
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to the 2024 Bevaris Alliance Franchise Disclosure Document, during the term of the franchise agreement, a franchisee or the individual involved cannot be involved as a consultant with any business concern that is (or intends to be) in competition with any Restricted Business. This restriction is in place to protect the confidential information, trade secrets, and business connections of Bevaris Alliance and its other franchisees.
This restriction extends not only to direct involvement but also to indirect involvement, whether on their own behalf or in conjunction with any firm, company, or person. The term "Restricted Business" refers to any business of Bevaris Alliance that is similar to the franchisee's business.
However, there are exceptions to these restrictions. The franchisee or individual can hold 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, they can be engaged in a business concern if their duties relate solely to geographical areas where the business is not in competition 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 restrictions are intended to be separate and severable, meaning that if any restriction is deemed void, it will be modified to the extent necessary to make it valid and effective, ensuring the remaining restrictions still apply. This clause aims to protect Bevaris Alliance's interests while allowing franchisees limited scope for other business activities that do not directly compete with the franchise.