During the term of the Beverly Anns Cookie franchise, what activities are prohibited regarding competitive businesses for the franchisee, principal owners, and their immediate family members?
Beverly_Anns_Cookie Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement/Additional Franchise Reservation Agreement | Summary |
|---|---|---|
| agent. You must also fully de-identify your GRM/GRT if you wish to transfer it to any party besides us or another franchisee. | ||
| (n) Franchisor's right of first refusal to acquire Franchisee's business | Section 16.2/Not Applicable | We have 30 days to match any offer for your Beverly Ann's Business or your GRM/GRT. |
| (o) Franchisor's right to purchase Franchisee's business | Section 26/Not Applicable | We may, but are not required to, purchase your Beverly Ann's Cookies Franchise, inventory, GRM/GRT, or equipment at fair market value if your Beverly Ann's Cookies Franchise is terminated for any reason by giving you written notice of our intent to exercise this option within 30 days after the date of termination or expiration of the Franchise Agreement. |
| (p) Death or disability of Franchisee | Section 16.5/Not Applicable | Franchisee must be a legal entity. Upon the Managing Owner's death or disability, the Managing Owner's interest must be assigned to a qualified party within 90 days of death or disability of the Managing Owner or the Franchise Agreement may be terminated. |
| (q) Non-competition covenants during the term of the Franchise | Section 18.2/Not Applicable | Subject to applicable state law, neither you, your principal owners, nor any immediate family members of you or your principal owners may participate in a competitive business, have no owning interest in, loan money to, or perform services for a competitive business anywhere. You may not interfere with us, our affiliates, or any other Beverly Ann's Cookies Franchise. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 49–54)
What This Means (2025 FDD)
According to Beverly Anns Cookie's 2025 Franchise Disclosure Document, franchisees, their principal owners, and their immediate family members face specific restrictions regarding competitive business activities during the franchise term. These parties are prohibited from participating in a competitive business, having any ownership interest in a competitive business, loaning money to a competitive business, or performing services for a competitive business anywhere. Franchisees are also barred from interfering with Beverly Anns Cookie, its affiliates, or any other Beverly Anns Cookie franchise. These restrictions are subject to applicable state law.
This non-compete clause is fairly standard in franchising, designed to protect the Beverly Anns Cookie brand and its market share. The breadth of the restriction—applying to the franchisee, principal owners, and their immediate family—is also typical. The clause prevents franchisees from directly competing with their own franchise or supporting other competing businesses. The restriction applies 'anywhere,' meaning it is not limited to a specific geographic area.
Prospective franchisees should carefully consider the implications of this non-compete agreement. It could limit their ability to engage in other business ventures, even those seemingly unrelated to the Beverly Anns Cookie business. Franchisees should seek legal counsel to understand the enforceability of the clause in their specific state, as state laws vary regarding non-compete agreements. They should also clarify with Beverly Anns Cookie what constitutes a 'competitive business' to avoid unintentional violations.
It is important to note that this non-competition covenant applies during the term of the franchise. A separate non-competition covenant applies after the franchise is terminated or expires, which may have different terms and geographic limitations.