What covenants are individuals with ownership interest in a Byrider franchisee, who do not execute a guaranty, bound by?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
Each person with ownership interest in Franchisee who does not execute a guaranty must execute a joinder in the form the Company prescribes undertaking personally to be bound by the covenants restricting transfers of interest in Franchisee and confidentiality and noncompetition covenants applicable to all owners of Franchisee under this Agreement.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, individuals with ownership interest in a Byrider franchise who do not execute a guaranty must sign a joinder. This joinder legally binds them to specific covenants within the Franchise Agreement.
Specifically, these individuals are bound by covenants restricting transfers of interest in the franchisee entity. This means they cannot freely sell or transfer their ownership stake without adhering to the conditions outlined in the agreement. They are also bound by confidentiality and noncompetition covenants that apply to all owners of the Byrider franchise.
In practical terms, this means that even if an owner does not fully guarantee the financial obligations of the franchise, they are still legally obligated to protect Byrider's confidential information and refrain from competing with the Byrider system. This ensures that all owners, regardless of their guaranty status, are invested in protecting the brand and its business interests. Prospective franchisees should carefully review these restrictions to understand their obligations and potential limitations on their activities.