What constitutes a 'Competitive Business' according to the Byrider franchise agreement?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
18.1 In-Term Covenant Not To Compete.
Franchisee and its owners agree that, during this Agreement's term, neither Franchisee, nor any owner, nor any member of Franchisee's or an owner's immediate family will:
- (a) have any direct or indirect, controlling or non-controlling interest as an owner (whether of record, beneficial or otherwise) in, or as a landlord of, a Competitive Business (defined below), wherever located or operating;
- (b) perform services as a director, officer, manager, employee, consultant, representative or agent, or in any other capacity, for a Competitive Business, wherever located or operating;
- (c) recruit or hire any employee of Company, Company's affiliates or Company's franchisees without obtaining prior written permission from such employer; or
- (d) divert or attempt to divert any actual or potential business or customer of the Franchisee's Business to a Competitive Business.
The term "Competitive Business" means any business (other than a Business being operated pursuant to a franchise agreement with the Company) which: (i) offers leasing or sells used automobiles, while retaining the retail installment contract or lease, (ii) operates itself as a provider of buy here pay here or lease financing whereby the selling dealer who originates retail installment contracts or leases and the assignee of the retail installment contracts or leases have some common equity ownership; (iii) provides vehicle repair services; or (iv) grants franchises or licenses to operate a business covered by the terms of (i), (ii) or (iii) of this subsection.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, the franchise agreement outlines specific restrictions on franchisees and their owners regarding competitive business activities during the term of the agreement.
The agreement states that franchisees and their owners cannot have any direct or indirect interest in, or act as a landlord for, a 'Competitive Business.' They are also prohibited from providing services to a Competitive Business as a director, officer, manager, employee, consultant, representative, or agent. Furthermore, franchisees cannot recruit or hire employees of Byrider, its affiliates, or other Byrider franchisees without prior written permission. Lastly, they are barred from diverting or attempting to divert any actual or potential business or customers of the franchisee's Byrider Business to a Competitive Business.
The term 'Competitive Business' is defined as any business, other than one operated under a franchise agreement with Byrider, that (i) offers leasing or sells used automobiles, while retaining the retail installment contract or lease, (ii) operates itself as a provider of buy here pay here or lease financing whereby the selling dealer who originates retail installment contracts or leases and the assignee of the retail installment contracts or leases have some common equity ownership; (iii) provides vehicle repair services; or (iv) grants franchises or licenses to operate a business covered by the terms of (i), (ii) or (iii) of this subsection. This definition is important for prospective franchisees to understand, as it clearly delineates the types of businesses that would be considered competitive and therefore prohibited during the franchise term.