Who must sign the non-competition covenant in favor of Central Bark Doggy Day Care?
Central_Bark_Doggy_Day_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee and Franchisee's owners shall have executed a noncompetition covenant in favor of Franchisor and the transferee agreeing that, for a period of two (2) years commencing on the effective date of the transfer, Franchisee, Franchisee's owners and members of the immediate families of Franchisee, and each of Franchisee's owners, will not hold any direct or indirect interest as a disclosed or beneficial owner, investor, partner, member, stockholder, director, officer, manager, employee, consultant, representative or agent, or in any other capacity, in a Competitive Business located or operating within the Designated Area or within ten (10) miles of any Central Bark Facility operated by Franchisor, Franchisor's affiliates, or other franchisees of Franchisor;
Source: Item 1 — Franchisee shall have paid all Royalty Fees, advertising fund contributions, LAC contributions, amounts owed for purchases by Franchisee from Franchisor, or Franchisor's affiliates, and all other amounts owed to Franchisor, Franchisor's affiliates, and third-party creditors, and shall have submitted to Franchisor all required reports and statements; (FDD pages 106–233)
What This Means (2025 FDD)
According to Central Bark Doggy Day Care's 2025 Franchise Disclosure Document, both the franchisee and the franchisee's owners are required to sign a non-competition covenant in favor of the franchisor. This agreement stipulates that for two years after the transfer date, the franchisee, their owners, and their immediate family members cannot hold any direct or indirect interest in a Competitive Business. This restriction applies if the Competitive Business is located or operating within the Designated Area or within ten miles of any Central Bark Doggy Day Care facility operated by the franchisor, its affiliates, or other franchisees.
This non-competition covenant is designed to protect Central Bark Doggy Day Care from unfair competition by preventing former franchisees and their families from leveraging their knowledge and experience to benefit a competing business. The term 'Competitive Business' is specifically defined in the glossary to include businesses offering similar services such as doggy day care, boarding, grooming, or training, as well as retail facilities with a significant portion of their revenue derived from canine-related products.
For a prospective franchisee, this requirement means that they, their owners, and their immediate family must be prepared to refrain from involvement in any competitive business within the specified area for two years after leaving the Central Bark Doggy Day Care system. This could impact their future business opportunities and should be carefully considered before entering into a franchise agreement. Franchisees should seek legal counsel to fully understand the implications of this covenant and ensure it is reasonable and enforceable under applicable state laws.
The non-compete agreement applies not only to the franchisee but also extends to the franchisee's owners and immediate family members, ensuring a comprehensive restriction on competitive activities. This broad scope is intended to prevent any potential circumvention of the non-compete obligations through family members or affiliated entities. Prospective franchisees should discuss this requirement with their families and business partners to ensure everyone is aware of and willing to comply with these restrictions.