What does the Chocolate Bash franchisee represent regarding agreements and non-competition when entering the agreement?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
tion is owned by CB Franchising (except for Confidential Information which CB Franchising licenses from another person or entity). This Section will survive the termination or expiration of this Agreement indefinitely.
13.2 Covenants Not to Compete.
- (a) Restriction In Term. During the term of this Agreement, neither Franchisee, any Owner, nor any spouse of an Owner (the "Restricted Parties") shall directly or indirectly have any ownership interest in, or be engaged or employed by, any Competitor.
- (b) Restriction Post Term. For two years after this Agreement expires or is terminated for any reason (or, if applicable, for two years after a Transfer), no Restricted Party shall directly or indirectly have any ownership interest in, or be engaged or employed by, any Competitor within five miles of Franchisee's Territory or the territory of any other Chocolate Bash business operating on the date of termination or transfer, as applicable.
- (c) Interpretation. The parties agree that each of the foregoing covenants is independent of any other covenant or provision of this Agreement. If all or any portion of the covenants in this Section is held to be unenforceable or unreasonable by any court, then the parties intend that the court modify such restriction to the extent reasonably necessary to protect the legitimate business interests of CB Franchising. Franchisee agrees that the existence of any claim it may have against CB Franchising shall not constitute a defense to the enforcement by CB Franchising of the covenants of this Section. If a Restricted Party fails to comply with the obligations under this Section during the restrictive period, then the restrictive period will be extended an additional day for each day of noncompliance.
- 13.3 Employee Recruitment. During the term of this Agreement and for one year after termination, transfer, or expiration of this Agreement, Franchisee shall not knowingly employ or seek to employ or engage as an independent contractor any person then employed by CB Franchising or its affiliates.
- 13.4 General Manager and Key Employees. If requested by CB Franchising, Franchisee will cause its general manager and other key employees to sign CB Franchising's then-current form of confidentiality and non-compete agreement (unless prohibited by applicable law).
**ARTICLE 14.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to the 2024 Chocolate Bash Franchise Disclosure Document, franchisees agree to certain covenants regarding non-competition, both during the term of the agreement and after its expiration or termination. During the term of the Franchise Agreement, the franchisee, any owner, and any spouse of an owner are prohibited from having any ownership interest in, or being engaged or employed by, any business that is considered a Competitor. Chocolate Bash defines a "Competitor" as any business which offers dessert products from a retail location focusing on chocolate.
Post-termination, for a period of two years after the agreement expires or is terminated, the restrictions continue. The franchisee, owner, or their spouse cannot have any ownership interest in, or be engaged or employed by, any Competitor within five miles of the franchisee's territory or the territory of any other Chocolate Bash business operating on the date of termination or transfer. These covenants are independent of any other covenant or provision of the Franchise Agreement, and the franchisee agrees that any claim they may have against CB Franchising does not constitute a defense against the enforcement of these non-compete covenants.
Additionally, during the term of the agreement and for one year after termination, transfer, or expiration, the franchisee is prohibited from knowingly employing or seeking to employ any person then employed by CB Franchising or its affiliates. Chocolate Bash may also request that the franchisee cause its general manager and other key employees to sign Chocolate Bash's confidentiality and non-compete agreement. In California, the covenant not to compete that extends beyond the expiration or termination of the Agreement may not be enforceable under California Law.