What specific activities are prohibited by the non-competition covenants during the term of the Bevaris Alliance 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. |
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, franchisees are restricted from certain business activities. Specifically, the non-competition covenant outlined in Section 20.1 of the franchise agreement prohibits franchisees from operating or having any ownership stake or interest in a business that is similar to Bevaris Alliance. This restriction is in place to protect Bevaris Alliance's market position and prevent franchisees from directly competing with the brand while they are still operating under its name and utilizing its resources.
This non-competition covenant has significant implications for prospective franchisees. It means that while operating a Bevaris Alliance franchise, the franchisee cannot simultaneously own or operate another business that offers similar products or services. This restriction is designed to ensure that the franchisee's full attention and efforts are dedicated to the success of their Bevaris Alliance franchise. It also prevents the franchisee from using the knowledge, resources, and customer base gained through the Bevaris Alliance franchise to benefit a competing business.
It is important for prospective franchisees to carefully consider this restriction and ensure that they are willing to commit solely to the Bevaris Alliance business during the term of the franchise agreement. Franchisees should seek clarification from Bevaris Alliance regarding what constitutes a "similar business" to fully understand the scope of the non-competition covenant. Understanding these restrictions is crucial for franchisees to avoid any potential breaches of the franchise agreement and to maintain a positive relationship with Bevaris Alliance.