During the term of the Bombs Away agreement, can an owner's spouse have an ownership interest in a competitor?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
13.2 Covenants Not to Compete.
- (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, during the term of the franchise agreement, a spouse of an owner is considered a "Restricted Party" and is prohibited from directly or indirectly having any ownership interest in a Competitor. The restriction also applies to lending money or providing financial assistance to, providing any services to, or being employed by, any Competitor.
This non-compete obligation extends not only to the franchisee and owners but also to their spouses, highlighting the broad reach of Bombs Away's competitive restrictions. This is a stricter than average requirement, as many franchise agreements only bind the franchisee and direct owners.
After the franchise agreement expires or is terminated, these restrictions continue for two years within the franchisee's territory or the territory of any other Bombs Away business. Therefore, a franchisee and their spouse must be aware of these limitations both during the term of the agreement and for two years afterward.