Are Bevaris Alliance franchisees subject to non-competition covenants after the franchise is terminated or expires?

According to Bevaris Alliance's 2024 Franchise Disclosure Document, franchisees are subject to non-competition covenants after the franchise is terminated or expires. Specifically, Section 20.1 of the franchise agreement outlines these restrictions.

Upon expiration or termination of the franchise, a franchisee is prohibited for 24 months from having any connection with a competing business. This means that for two years after leaving the Bevaris Alliance system, a former franchisee cannot be involved with a similar business, whether as an owner, operator, employee, or in any other capacity. This restriction is designed to protect Bevaris Alliance's market share and confidential information.

These types of non-compete clauses are common in franchising to protect the brand and prevent franchisees from using the franchisor's knowledge to directly compete. Prospective franchisees should carefully consider the implications of this restriction, especially if they plan to remain in the same industry after their franchise agreement ends. It is important to understand the scope of what constitutes a "competing business" as defined in the franchise agreement.