Does the non-solicitation covenant for Burneys Sweets More apply to the franchisee's owners?
Burneys_Sweets_More Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Burneys Sweets More's 2025 Franchise Disclosure Document, the non-solicitation covenant applies to both the franchisee and the franchisee's owners. Specifically, during both the initial term of the agreement and for a period after termination, expiration, or non-renewal, both the franchisee and their owners are restricted from soliciting or diverting customers or vendors of Burneys Sweets More to a competitive business. This restriction is designed to protect Burneys Sweets More's confidential information, customer relationships, and vendor connections.
During the initial term, the franchisee and their owners are prohibited from soliciting or diverting any person or party who is or was a customer of the shop to any competitive business. They are also restricted from soliciting or diverting any vendor that has done business with the shop to provide services to a competitive business or cease providing services to Burneys Sweets More. These restrictions require the franchisor's prior written consent.
Post-termination, the non-solicitation covenant extends for a specific "Restrictive Period" and within a defined "Restrictive Territory." The franchisee and their owners are prohibited from soliciting or diverting vendors that have done business with the shop during the one-year period prior to the termination to provide services to a competitive business. They are also restricted from soliciting or diverting any person or party that was a customer of the shop during the one-year period prior to termination 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 or its affiliates operate, territories of other Burneys Sweets More franchisees, and an area within a 10-mile radius of the franchised business or other Burneys Sweets More shops.
Burneys Sweets More emphasizes that these covenants are reasonable and necessary to protect its legitimate business interests and goodwill. The FDD asserts that these restrictions will not unduly impair the franchisee's or their owners' ability to earn a living. The document also states that any violation of these covenants will result in an extension of the Restrictive Period by the duration of the violation.