Is the Guaranty and Non-Compete Agreement a separate document from the Chocolate Bash Franchise Agreement?

According to Chocolate Bash's 2024 Franchise Disclosure Document, the Guaranty and Non-Compete Agreement is a separate document that is attached to the Franchise Agreement. Specifically, the FDD references "Attachment 3 to Franchise Agreement" as the location of the Guaranty and Non-Compete Agreement.

This means that in addition to signing the standard Chocolate Bash Franchise Agreement, franchisees and their owners will also be required to sign a separate Guaranty and Non-Compete Agreement. This agreement ensures that the franchisee and owners personally guarantee the franchisee's obligations to Chocolate Bash. It also restricts their ability to engage in competitive activities during and after the term of the franchise agreement.

The Guaranty and Non-Compete Agreement contains covenants not to compete that apply both during the term of the Franchise Agreement and for two years after the agreement expires or is terminated. These restrictions prevent the guarantor from having any ownership interest in or being employed by any competitor within five miles of the franchisee's territory or any other Chocolate Bash business. The agreement also includes clauses regarding confidential information, requiring the guarantor to maintain the confidentiality of sensitive business information both during and after the franchise term.

Prospective Chocolate Bash franchisees should carefully review the terms of both the Franchise Agreement and the Guaranty and Non-Compete Agreement with legal counsel to fully understand their obligations and restrictions. This is especially important for owners and their spouses, as the guaranty could jeopardize marital assets, particularly in community property states like California.