Does the Chocolate Bash Guaranty specify a time limit for the Guarantor's obligations?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
- **2.
Confidential Information.** With respect to all Confidential Information Guarantor shall (a) adhere to all security procedures prescribed by CB Franchising for maintaining confidentiality, (b) disclose such information to its employees only to the extent necessary for the operation of the Business; (c) not use any such information in any other business or in any manner not specifically authorized or approved in writing by CB Franchising, (d) exercise the highest degree of diligence and make every effort to maintain the confidentiality of all such information during and after the term of the Franchise Agreement, (e) not copy or otherwise reproduce any Confidential Information, and (f) promptly report any unauthorized disclosure or use of Confidential Information.
Guarantor acknowledges that all Confidential Information is owned by CB Franchising or its affiliates (except for Confidential Information which CB Franchising licenses
from another person or entity). Guarantor acknowledges that all customer data generated or obtained by Guarantor is Confidential Information belonging to CB Franchising. This Section will survive the termination or expiration of the Franchise Agreement indefinitely.
3. Covenants Not to Compete.
- (a) Restriction In Term.
During the term of the Franchise Agreement, Guarantor shall not directly or indirectly have any ownership interest in, or be engaged or employed by, any Competitor.
- (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.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to the 2024 Chocolate Bash Franchise Disclosure Document, the Guaranty does include time limits for specific obligations. Specifically, the guarantor's obligations regarding covenants not to compete are limited to the term of the Franchise Agreement and for a period of two years after the agreement expires or is terminated. This post-term restriction also applies for two years after a transfer by the guarantor, if applicable.
During the term of the Franchise Agreement, the guarantor is prohibited from having any ownership interest in, or being engaged or employed by, any competitor. After the agreement expires or is terminated, this restriction continues for two years 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.
Additionally, the FDD states that the obligations regarding confidential information survive the termination or expiration of the Franchise Agreement indefinitely. This means the guarantor's duty to protect confidential information continues without a time limit, even after the franchise agreement ends.