What is a Bevaris Alliance franchisee prohibited from doing during the term of the franchise regarding similar businesses?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| which must be approved by us. | ||
| l. Bevaris approval of transfer | Section | We have the right to approve all transfers, which shall be |
| by franchisee | 16.11 | subject to the provisions of the Franchise Agreement. |
| m. Conditions for Bevaris approval of transfer | Section 16.11 | Transferee approved by us, transfer fee paid, transferee not competitor, your account is current, you sign a release, transferee signs all documents, lender consents, and subordination agreements. |
| n. Bevaris’ right of first refusal to acquire franchisee’s business | Section 16.3 | Bevaris can match any offer for the purchase of Your franchise at Bevaris’ option. |
| o. Bevaris’ option to purchase Your business | Section 16.7 | Upon transfer, fair market value (but no value for goodwill), legal compliance, no assumption of your liabilities. |
| p. Death or disability of | Section 17 | Franchise may be assigned by estate to approve transferee |
| franchisee | in three months. | |
| q. Non-competition covenants during the term of the franchise | Section 20.1 | You are prohibited from operating or having an interest in a similar business. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 17–18)
What This Means (2024 FDD)
According to Bevaris Alliance's 2024 Franchise Disclosure Document, during the term of the franchise agreement, a franchisee is prohibited from operating or having an interest in a similar business. This restriction is detailed in Section 20.1 of the franchise agreement, which covers non-competition covenants during the franchise term.
This non-compete clause means that while operating a Bevaris Alliance franchise, a franchisee cannot simultaneously own, operate, or hold any financial stake in a business that is considered similar to Bevaris Alliance. This is a fairly standard practice in franchising to protect the brand's market share and prevent franchisees from directly competing with the system.
It is important for prospective franchisees to carefully review Section 20.1 of the franchise agreement to fully understand the scope of this restriction. Franchisees should consider what constitutes a "similar business" and whether this restriction might affect any current or future business interests they may have. Understanding the specific limitations is crucial before entering into the franchise agreement.