Are Bevaris Alliance franchisees subject to non-competition covenants during the term of the franchise?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| 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. |
| r. Non-competition covenants | Section 20.1 | You are prohibited for 24 months from expiration or |
| after the franchise is | termination of the franchise from having a connection | |
| terminated or expires | with a competing 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, franchisees are subject to non-competition covenants both during the term of the franchise and after the franchise is terminated or expires.
During the term of the franchise agreement, Section 20.1 states that franchisees are prohibited from operating or having an interest in a similar business. This means that while operating a Bevaris Alliance franchise, a franchisee cannot simultaneously own or participate in a competing business. This restriction is common in franchising to protect the brand and prevent franchisees from diverting resources or knowledge to other ventures.
After the franchise is terminated or expires, Section 20.1 of the franchise agreement states that franchisees are prohibited for 24 months from having a connection with a competing business. This post-term non-compete clause prevents former franchisees from immediately leveraging the knowledge and experience gained from the Bevaris Alliance system to compete against it. The 24-month restriction period is designed to give Bevaris Alliance a reasonable window to protect its market share and brand reputation.
Prospective franchisees should carefully review Section 20.1 of the franchise agreement to fully understand the scope and limitations of these non-competition covenants. It is important to consider how these restrictions might impact future business opportunities, both during and after the franchise term.