What activities are prohibited under the post-termination non-competition covenants for a Bhc Master Franchisee?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
any business or customer of the Franchised Business to any competitor, by direct or indirect inducement or otherwise, or (ii) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks or the System.
11.2 Post Termination Non-Competition Covenants.
- (a) For a period of two years after the date ("Termination Date") this Agreement is terminated, is canceled, or expires without renewal pursuant to section 5.2 of this Agreement, Master Franchisee agrees that neither Master Franchisee nor any Principal Equity Operator will (either directly or indirectly, for itself or themselves, or through, on behalf of, or in conjunction with, any person, persons, partnership, corporation or other entity) operate, manage, own, assist or hold an interest in (direct or indirect as an employee, officer, director, shareowner, partner or otherwise), or engage in, any competing business selling goods or offering services equivalent to BHC Products or the Franchised Business, within a radius of 25 miles of Master Franchisee's Territory or any other authorized retail location selling BHC Products, without Franchisor's express prior written consent, which consent may be withheld in Franchisor's sole and absolute discretion. Following termination or expiration of this Agreement, Master Franchisee must always refrain from any use, direct or indirect, of any Proprietary Information or Trade Secrets.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, for two years after the termination, cancellation, or expiration of the Master Franchise Agreement, the Master Franchisee and any Principal Equity Operator are restricted from engaging in certain activities. Specifically, they cannot operate, manage, own, assist, or hold an interest in any business that competes with Bhc by selling similar goods or offering equivalent services.
This restriction applies within a 25-mile radius of the Master Franchisee's territory or any other authorized retail location selling Bhc products. This is without the express prior written consent from Bhc, which Bhc can withhold at its discretion. Additionally, the Master Franchisee must refrain from using any Proprietary Information or Trade Secrets after the agreement ends.
It is important to note that these non-competition covenants are subject to applicable laws and regulations. If any law limits Bhc's rights under the agreement, the relevant section will be amended to comply with legal requirements. However, the amendment will only be to the extent necessary to meet the legal requirements. This ensures that the non-competition provisions are enforceable while protecting Bhc's interests and trade secrets.