During the term of the Bombs Away Franchise Agreement, 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 the 2024 Bombs Away Franchise Disclosure Document, the Guarantor is restricted from being employed by a Competitor during the term of the Franchise Agreement. Specifically, 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.
This restriction is part of the Guaranty and Non-Compete Agreement that the Guarantor must sign to induce Bombs Away Franchising to enter into the Franchise Agreement with the Franchisee. The term 'Competitor' is not defined in the excerpt, so prospective franchisees should seek clarification from Bombs Away regarding what constitutes a 'Competitor' to fully understand the scope of this restriction.
After the Franchise Agreement expires or is terminated, the Guarantor is further restricted for two years from engaging with any Competitor operating within the Franchisee's territory or the territory of any other Bombs Away business operating on the date of termination or transfer. If the Guarantor fails to comply with these obligations, the restrictive period will be extended by one day for each day of noncompliance. This non-compete agreement aims to protect Bombs Away's business interests by preventing those with financial ties to the franchise from supporting competing businesses during and after the franchise term.