Does the Chocolate Bash Franchise Agreement include a Guaranty and Non-Compete Agreement?

According to Chocolate Bash's 2024 Franchise Disclosure Document, the Franchise Agreement includes both a Guaranty and a Non-Compete Agreement. This is explicitly stated in the list of exhibits included in the disclosure document. Specifically, Exhibit B is the Franchise Agreement (with Guaranty and Non-Compete Agreement).

For a prospective Chocolate Bash franchisee, this means that the Franchise Agreement they will sign contains provisions for both a guaranty and a non-compete. The guaranty likely requires someone, possibly the franchisee or a related party, to guarantee the franchisee's obligations under the agreement. The non-compete agreement restricts the franchisee's ability to engage in similar businesses during and after the franchise term, which is a common practice in franchising to protect the brand's market and customer base.

However, the FDD also notes that if the Chocolate Bash franchise is in California, the covenant not to compete which extends beyond the termination of the franchise may not be enforceable under California law. It is important for prospective franchisees to carefully review Exhibit B and understand the terms and conditions of both the Guaranty and Non-Compete Agreements, and to seek legal counsel to understand their rights and obligations, especially in states like California where certain provisions may not be enforceable.