What section of the Bevaris Alliance Franchise Agreement outlines the non-competition covenants during the term of the franchise?
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. |
| 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, Section 20.1 of the Franchise Agreement addresses non-competition covenants during the term of the franchise. This section states that franchisees are prohibited from operating or having an interest in a similar business while the franchise agreement is in effect. This is a fairly standard clause in franchise agreements, designed to protect the franchisor's business model and market share.
This restriction means that as a Bevaris Alliance franchisee, you cannot simultaneously own or be involved in a competing business. This could limit your ability to pursue other business ventures during the term of your franchise agreement. It is important to fully understand the scope of what constitutes a "similar business" as defined in the Franchise Agreement to ensure you remain in compliance.
In addition to non-competition covenants during the franchise term, Section 20.1 also addresses non-competition after the franchise is terminated or expires. It states that for 24 months after the end of the franchise agreement, franchisees are prohibited from having a connection with a competing business. This extended restriction further protects Bevaris Alliance's interests even after the franchisee is no longer part of the system. Prospective franchisees should carefully consider the implications of these non-competition clauses before entering into a franchise agreement with Bevaris Alliance.