What is the franchisee agreeing to when they agree that the covenants in Section 3 of the Bigfoot Forestry agreement are reasonable?
Bigfoot_Forestry Franchise · 2025 FDDAnswer from 2025 FDD Document
3. BRAND PROTECTION COVENANTS.
- (a) Intellectual Property and Confidential Information. You agree to: (i) refrain from using the Intellectual Property or Confidential Information in any capacity or for any purpose other than the operation of Franchisee's Bigfoot Forestry Business in compliance with the Franchise Agreement and Manual; (ii) maintain the confidentiality of the Confidential Information at all times; (iii) refrain from making unauthorized copies of documents containing Confidential Information; (iv) take all steps we reasonably require to prevent unauthorized use or disclosure of Confidential Information; and (v) immediately stop using the Intellectual Property and Confidential Information at such time that you are (or your spouse is) no longer an Owner. You agree to assign to us or our designee, without charge, all rights to any Improvement developed by you, including the right to grant sublicenses. If applicable Law precludes you from assigning ownership to us, then you agree to perpetually license the Improvement to us, free of charge, with full rights to use, commercialize and sublicense the same.
- (b) Unfair Competition. You may not engage in any Prohibited Activities at any time: (i) that you are (or your spouse is) an Owner; or (ii) during the Restricted Period. Notwithstanding the foregoing, you may have an interest in a Competing Business during the Restricted Period as long as the Competing Business does not provide competitive services at job sites located in the Restricted Territory. If you engage in any Prohibited Activity during the Restricted Period (other than having an interest in a
Competing Business permitted by this Section) your Restricted Period will be extended by the period of time during which you engaged in the Prohibited Activity. Any such extension of time will not constitute a waiver of your breach or impair any of our rights or remedies relating to your breach. For purposes of clarity, you remain bound by any non-competition covenants in other Definitive Agreements that remain in effect for a period of time that extends beyond the expiration of the Restricted Period under this Agreement, and the expiration of the Restricted Period under this Agreement does not in any way diminish your obligation to comply with such other covenants.
Source: Item 23 — RECEIPT (FDD pages 42–162)
What This Means (2025 FDD)
According to the 2025 Bigfoot Forestry Franchise Disclosure Document, Section 3 of the franchise agreement outlines brand protection covenants related to intellectual property, confidential information, and unfair competition. By agreeing that these covenants are reasonable, a franchisee acknowledges and accepts the restrictions and obligations placed upon them to protect Bigfoot Forestry's brand and proprietary information. This includes agreeing to restrictions on using intellectual property and confidential information only for the operation of their Bigfoot Forestry business, maintaining the confidentiality of sensitive information, and refraining from unauthorized copying of confidential documents.
Furthermore, the franchisee commits to taking necessary steps to prevent unauthorized use or disclosure of confidential information and to cease using intellectual property and confidential information if they are no longer an owner. The franchisee also agrees to assign to Bigfoot Forestry any rights to improvements they develop related to the business, or to license those improvements to Bigfoot Forestry if assignment is not legally possible. This ensures that any advancements or innovations made by the franchisee become the property of, or are available for use by, Bigfoot Forestry.
The agreement also covers unfair competition, preventing the franchisee from engaging in prohibited activities while they are an owner and during a restricted period. While they can have an interest in a competing business during the restricted period if it doesn't provide competitive services within the restricted territory, engaging in prohibited activities can extend the restricted period. The franchisee remains bound by any non-competition covenants in other agreements that extend beyond the restricted period of the franchise agreement. These stipulations collectively aim to protect Bigfoot Forestry's market position and prevent franchisees from leveraging confidential information or intellectual property to compete unfairly.
In essence, by agreeing to the reasonableness of these covenants, the franchisee is accepting significant limitations on their business activities, both during and after the franchise term, to safeguard Bigfoot Forestry's intellectual property, confidential information, and competitive advantage. Prospective franchisees should carefully consider these restrictions and their potential impact on their future business endeavors.