What happens to the Franchise Agreement if Byrider exercises its right to terminate it?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
all covenants contained in Article XVIII herein; (I) pay all costs, including attorneys' fees, incurred by the Company in terminating this Agreement.
Further, if the Franchisee or an affiliate of Franchisee is the titleholder of the Business Location and if the termination of this Agreement is due to Franchisee's breach prior to the scheduled expiration of this Agreement according to 5.1 herein, the Company shall have the right, but not the obligation, to enter into a lease for the Business Location at a fair market value rental for a term of two (2) years.
- 17.2 Termination of Access to BYRIDER Computer Software. Upon termination or expiration of this Agreement, the Software Agreement shall also concurrently expire or terminate. Upon such termination or expiration, the Company shall not be obligated to provide the Franchisee with access to the BYRIDER Computer Software or provide any services with respect thereto, except that the Company shall promptly make available to Franchisee (in a commercially reasonable media and form or format, as Company shall determine) any and all information needed to permit Franchisee (or its assignee) to collect its receivables and otherwise engage in an orderly transfer, transition or wind down of Franchisee's Business.
- 17.3 Survival of Obligations. The expiration or termination of this Agreement shall be without prejudice to any of the rights and remedies of the Company with respect to the foregoing obligations, competitive covenants and other like matters that reasonably would survive the end of this Agreement.
ARTICLE XVIII
COVENANTS NOT TO COMPETE
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.
- 18.2 After Termination. With the exception of activities usual and customary to the winding-up or transfer of a business (e.g.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, the consequences of Byrider terminating the Franchise Agreement depend on whether the termination occurs before or after the franchisee's business opens. If Byrider terminates the agreement before the business opens due to reasons such as the franchisee failing to complete the initial training program satisfactorily, not opening the business within one year, or providing materially false information, the agreement becomes null and void. In this case, neither party has further obligations to the other, except for those obligations that naturally survive termination.
If the termination occurs before opening and the franchisee has entered into a lease or purchase agreements for the business location, Byrider has the right, but not the obligation, to require the franchisee to assign its rights under those agreements to Byrider or its designee. If Byrider elects to have these assignments made, Byrider or its designee will assume all of the franchisee's obligations under such leases and purchase agreements.
If the Franchise Agreement is terminated or expires, the Software Agreement shall also concurrently expire or terminate. Byrider is not obligated to provide the franchisee with access to the BYRIDER Computer Software or provide any services, except that Byrider will promptly make available to Franchisee any and all information needed to permit Franchisee to collect its receivables and otherwise engage in an orderly transfer, transition or wind down of Franchisee's Business. The expiration or termination of this Agreement shall be without prejudice to any of the rights and remedies of Byrider with respect to the foregoing obligations, competitive covenants and other like matters that reasonably would survive the end of this Agreement.