Does the Chocolate Bash Guaranty agreement include any geographic limitations on the non-compete obligations?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to the 2024 Chocolate Bash Franchise Disclosure Document, the Franchise Agreement outlines non-compete obligations. During the term of the agreement, the franchisee, any owner, or their spouse cannot have any ownership interest in, or be involved with, any competitor.
After the agreement expires or is terminated, the non-compete restriction extends for two years. During this time, these restricted parties are prohibited from having an ownership interest in, or being engaged or employed by, any competitor within five miles of the franchisee's territory or the territory of any other operating Chocolate Bash business on the date of termination or transfer.
The Chocolate Bash agreement specifies that these non-compete covenants are independent of other provisions. Should a court find any part of these covenants unenforceable, the parties intend for the court to modify the restriction to protect Chocolate Bash's legitimate business interests. The agreement also states that any claim the franchisee has against Chocolate Bash will not be a defense against the enforcement of these non-compete covenants. If a restricted party violates these obligations, the restrictive period will be extended by one day for each day of noncompliance.