Does the Chocolate Bash Guaranty specify any geographic limitations on the Guarantor's obligations?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
- (b) Restriction Post Term.
For two years after the Franchise Agreement expires or is terminated for any reason (or, if applicable, for two years after a Transfer by Guarantor), Guarantor shall not directly or indirectly have any ownership interest in, or be engaged or employed by, any Competitor located 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.
Guarantor agrees that each of the foregoing covenants is independent of any other covenant or provision of this Guaranty or the Franchise 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.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to the 2024 Chocolate Bash Franchise Disclosure Document, the Guaranty includes geographic limitations regarding the guarantor's obligations not to compete. Specifically, for two years after the Franchise Agreement expires or is terminated, the Guarantor cannot have any ownership interest in, or be employed by, any competitor located 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.
This restriction applies regardless of the reason for termination or transfer. The Guarantor agrees that each covenant is independent of any other covenant or provision of the Guaranty or the Franchise Agreement. This means that if one part of the agreement is found to be unenforceable, the rest of the agreement still stands.
If a court finds any part of the non-compete covenants to be unenforceable or unreasonable, the parties intend for the court to modify the restriction only to the extent necessary to protect Chocolate Bash's legitimate business interests. This ensures that the non-compete is as narrow as possible while still protecting the brand.