Where in the Byrider Franchise Agreement can I find information on 'Covenants Not to Compete'?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
n operation or under construction as of the date of expiration or termination of this Agreement. The one (1) year post-Term noncompete period in this Article 18.2 shall begin on the date Franchisee complies with Article 18.2.
- 18.3 Covenants by Franchisee's Personnel. The Company shall have the right to require the Designated Manager and all other personnel performing managerial or supervisory
functions and all personnel receiving special training from the Company to execute confidentiality covenants in a form satisfactory to the Company.
- 18.4 Enforcement of Covenants Not To Compete. The Franchisee acknowledges that violation of the covenants not to compete contained in this Agreement would result in immediate and irreparable injury to the Company for which no adequate remedy at law will be available. Accordingly, the Franchisee hereby acknowledges the Company's right to seek an injunction and agrees not to contest any application by the Company for such injunction to prohibit any conduct by the Franchisee in violation of the terms of those covenants not to compete set forth in this Agreement. The Franchisee expressly agrees that it may be conclusively presumed that a violation of the terms of said covenants not to compete was accomplished by and through the Franchisee's unlawful utilization of the Company's Confidential Information, know-how, methods and procedures. Further, the Franchisee expressly agrees that the existence of any claims it may have against the Company, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by the Company for the covenants not to compete set forth in this Agreement.
- 18.5 Fee for Employment Practices. Franchisee acknowledges that the Company and Byrider Businesses make substantial investment in the hiring, training, and developing of its and their employees.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to the 2025 Byrider Franchise Disclosure Document, Article XVIII of the Franchise Agreement is dedicated to covenants not to compete. Specifically, section 18.1 outlines the in-term covenant not to compete, which restricts the franchisee and its owners from engaging in competitive activities during the agreement's term. Section 18.4 discusses the enforcement of these covenants, emphasizing that violations would cause immediate and irreparable harm to Byrider, allowing Byrider to seek an injunction. Section 18.5 addresses fees for employment practices, stipulating that if a franchisee hires an employee of Byrider or another Byrider business within a year of their employment, the franchisee must pay damages equal to three times the employee's annual compensation.
These covenants are designed to protect Byrider's market position and confidential information. The in-term covenant ensures that franchisees remain committed to the Byrider system throughout the agreement. The post-term covenant, while not detailed in this section, is referenced as being subject to state laws, particularly in North Dakota and California, where enforceability may be limited. The employment practices fee aims to prevent franchisees from poaching Byrider's trained staff, which represents a significant investment by the company.
Prospective franchisees should carefully review Article XVIII to understand the full scope of these restrictions. They should also be aware that the enforceability of non-compete clauses can vary by state, and Byrider acknowledges this by stating they will enforce the covenants to the maximum extent the law allows. Franchisees should consult with legal counsel to assess the implications of these covenants in their specific location and business context.