Who is considered a 'Restricted Party' under the Bombs Away agreement?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
- (a) Restriction In Term. During the term of this Agreement, neither Franchisee, any Owner, nor any spouse of an Owner (the "Restricted Parties") shall directly or indirectly have any ownership interest in, lend money or provide financial assistance to, provide any services to, or be employed by, any Competitor.
- (b) Restriction Post Term. For two years after this Agreement expires or is terminated for any reason (or, if applicable, for two years after a Transfer), no Restricted Party shall directly or indirectly have any ownership interest in, lend money or provide financial assistance to, provide any services to, or be employed by, any Competitor operating in any of Franchisee's Territory or
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, a 'Restricted Party' includes the franchisee, any owner, and any spouse of an owner. This definition is relevant to the covenants not to compete, which restrict these parties from engaging with any competitor during the term of the franchise agreement.
Specifically, these 'Restricted Parties' are prohibited from having any ownership interest in, lending money or providing financial assistance to, providing services to, or being employed by, any competitor during the term of the agreement. This restriction ensures that those closely associated with the Bombs Away franchise are fully committed to the brand and do not support competing businesses.
After the franchise agreement expires or is terminated, these restrictions continue for two years. During this post-term period, the 'Restricted Parties' are barred from engaging with any competitor operating within the franchisee's territory or the territory of any other Bombs Away business. This extended restriction aims to protect Bombs Away's market share and prevent former franchisees or their close associates from leveraging inside knowledge to benefit a competing business in the same area.