After the Bombs Away Franchise Agreement is terminated, can the Guarantor be employed by a Competitor?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
- (a) Restriction In Term.
During the term of the Franchise Agreement, Guarantor shall not 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 the Franchise Agreement expires or is terminated for any reason (or, if applicable, for two years after a Transfer by Guarantor), Guarantor shall not 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 the territory of any other Bombs Away business operating on the date of termination or transfer, as applicable.
- (c) Interpretation.
Guarantor agrees that each of the foregoing covenants is independent of any other covenant or provision of this Guaranty or the Franchise Agreement.
If all or any portion of the covenants in this Section is held to be unenforceable or unreasonable by any court or arbitrator, then the parties intend that the court or arbitrator modify such restriction to the extent reasonably necessary to protect the legitimate business interests of Bombs Away Franchising.
Guarantor agrees that the existence of any claim it or Franchisee may have against Bombs Away Franchising shall not constitute a defense to the enforcement by Bombs Away Franchising of the covenants of this Section.
If Guarantor fails to comply with the obligations under this Section during the restrictive period, then the restrictive period will be extended an additional day for each day of noncompliance.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, the Guarantor is restricted from being employed by a Competitor for a certain period after the Franchise Agreement terminates. During the term of the Franchise Agreement, the Guarantor cannot 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.
Following the expiration or termination of the Franchise Agreement for any reason, the Guarantor faces a two-year restriction. During this two-year period, the Guarantor is prohibited from engaging in similar activities with a Competitor operating within the franchisee's territory or the territory of any other Bombs Away business operating on the date of termination or transfer. This restriction includes owning, lending money to, providing services to, or being employed by a Competitor.
The Guaranty and Non-Compete Agreement specifies that each covenant is independent. If any part of these covenants is deemed unenforceable, the intention is for a court or arbitrator to modify the restriction to protect Bombs Away's legitimate business interests. Non-compliance with these obligations during the restrictive period will extend the period by one day for each day of noncompliance.