What does a Burneys Sweets More franchisee agree not to do regarding prohibited transactions?
Burneys_Sweets_More Franchise · 2025 FDDAnswer from 2025 FDD Document
During the Initial Term, Franchisee and its Owners will not, without Franchisor's prior written consent for themselves, or through, on behalf of, or in conjunction with any other person or entity:
(i) solicit, divert or attempt to solicit or divert any person or party who is or was a customer of the Shop at any time during the Initial Term, to any Competitive Business, as Franchisee agrees that all goodwill associated with Franchisee's operation under the Marks and the System, and all customer information associated therewith, inure to Franchisor; or
(ii) solicit, divert, or attempt to solicit or divert, any vendor that has done business with the Shop to provide supplies, products, equipment, merchandise, or services to a Competitive Business or to cease providing supplies, products, equipment, merchandise, or services to BURNEY'S SWEETS AND MORE businesses.
(c) Franchisee's Covenant Against Unfair Competition Post-Term.
In partial consideration for Franchisor allowing Franchisee to license Franchisor's Marks and Confidential Information, Franchisee and each of the Franchisee's Owners covenant and agree that for a period of two (2) years after the termination, expiration, or non-renewal of this Agreement, regardless of the reason for such termination, expiration, or non-renewal ("Restrictive Period"), Franchisee and its Owners shall not, within the Restrictive Territory (as defined in Section 14(e) below) engage in any of the following:
(i) franchise, license, or own an interest in any Competitive Business, including as franchisor, licensor, franchisee or licensee, provided that the purchase of a publicly traded security of a corporation engaged in such business or service shall not in itself be deemed violative of this Section 14(c) so long as Franchisee does not own themselves or through their spouses or partners more than one percent (1%) of the securities of such corporation; or
(ii) engage in any Competitive Business as an officer, director, employee, consultant, manager, operator, or independent contractor in any capacity in which Franchisee or its Owners would be in a position to use or disclose Confidential Information.
(d) Franchisee's Non-Solicitation Covenant Post-Term.
In partial consideration for Franchisor allowing Franchisee to license Franchisor's Marks and Confidential Information, Franchisee and each of the Franchisee's Owners covenant and agree that during the Restrictive Period, Franchisee and its Owners shall not, within the Restrictive Territory engage in any of the following:
(i) solicit, divert, or attempt to solicit or divert, any vendor that has done business with the Shop during the one (1) year period prior to the expiration, termination, or non-renewal of this Agreement to provide supplies, products, equipment, merchandise, or services to a Competitive Business or to cease providing supplies, products, equipment, merchandise, or services to BURNEY'S SWEETS & MORE businesses; or
(ii) solicit, divert or attempt to solicit or divert any person or party that was a customer of the Shop during the one (1) year period prior to the expiration, termination, or non-renewal of this Agreement, to any Competitive Business.
(e) Restrictive Territory.
For purposes of this Section 14, the term "Restrictive Territory" means the following:
(i) At the Location of the Franchised Business; or
(ii) The Territory served by Franchisee (as defined in Attachment 1) as that Territory exists on the date of termination, expiration, non-renewal, or transfer of this Agreement; or
(iii) The territories in which Franchisor or its affiliates operate any BURNEY'S SWEETS & MORE businesses or locations as of the date of termination, expiration, nonrenewal, or transfer of this Agreement, including their locations; or
(iv) The territories of any of Franchisor's other BURNEY'S SWEETS & MORE franchisees as those territories exist as of the date of termination, expiration, nonrenewal, or transfer of this Agreement, including their locations; or
(v) An area which is within a 10-mile radius of:
(A) The Location of the Franchised Business as of the date of termination, expiration, non-renewal, or transfer of this Agreement, including the Location, or
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to the 2025 Burneys Sweets More Franchise Disclosure Document, during the initial term of the agreement, a franchisee is prohibited from soliciting or diverting customers of the shop to a competitive business. This restriction applies to any person or party who was a customer at any time during the initial term. Additionally, franchisees are not allowed to solicit or divert vendors who have done business with the shop to provide services or supplies to a competitive business, or to cease providing those services to Burneys Sweets More businesses. These restrictions require the franchisor's prior written consent.
Post-termination, for a period of two years after the agreement ends (referred to as the "Restrictive Period"), franchisees are restricted from certain activities within a defined "Restrictive Territory." This includes not franchising, licensing, or owning an interest in any Competitive Business. However, owning less than 1% of a publicly traded security of a corporation engaged in such business is permitted. Franchisees also cannot engage in a Competitive Business as an officer, director, employee, consultant, manager, operator, or independent contractor if they would be in a position to use or disclose confidential information.
Furthermore, after the agreement ends, franchisees are prohibited from soliciting or diverting vendors who have done business with the shop during the one-year period prior to the termination to provide services to a Competitive Business or cease providing services to Burneys Sweets More. They also cannot solicit or divert any person or party that was a customer of the shop during the one-year period prior to the end of the agreement to any Competitive Business. The "Restrictive Territory" includes the location of the franchised business, the territory served by the franchisee, territories where Burneys Sweets More operates, territories of other Burneys Sweets More franchisees, and an area within a 10-mile radius of the franchised business location.