What section of the Bevaris Alliance Franchise Agreement outlines the non-competition covenants after the franchise is terminated or expires?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
| Document download | |||
|---|---|---|---|
| Section in Franchise | |||
| Pr | ovision | Agreement | Summary which must be approved by us. |
| 1. | 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 | Section | Transferee approved by us, transfer fee paid, transferee |
| approval of transfer | 16.11 | 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. |
| 0. | 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 franchisee | Section 17 | Franchise may be assigned by estate to approve transferee 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. |
| r. | Non-competition covenants after the franchise is terminated or expires | Section 20.1 | You are prohibited for 24 months from expiration or termination of the franchise from having a connection 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, Section 20.1 of the Franchise Agreement outlines the non-competition covenants that apply after the franchise is terminated or expires. This section prohibits a franchisee for 24 months after the expiration or termination of the franchise from having any connection with a competing business.
This non-compete clause is a standard practice in franchising to protect the brand and proprietary information of Bevaris Alliance. It prevents former franchisees from using the knowledge and experience gained while operating a Bevaris Alliance franchise to directly compete with the system. The 24-month restriction means that a franchisee cannot be involved with a competing business for two years after their franchise agreement ends.
Prospective franchisees should carefully consider the implications of this non-compete clause. It could limit their ability to work in the same industry or start a similar business in the same area after leaving the Bevaris Alliance system. It is important to fully understand the scope and enforceability of this clause before signing the Franchise Agreement. Franchisees should seek legal counsel to assess the specific restrictions and their potential impact on their future career options.