Is the restriction on employee recruitment by a Chocolate Bash franchisee applicable after a transfer of the agreement?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, the restriction on employee recruitment extends beyond a transfer of the franchise agreement. Specifically, a Chocolate Bash franchisee is prohibited from knowingly employing or seeking to employ anyone currently working for Chocolate Bash or its affiliates, not only during the term of the agreement but also for one year following the termination, transfer, or expiration of the agreement.
This provision means that if a franchisee sells or transfers their Chocolate Bash franchise to a new owner, the original franchisee remains bound by the restriction on recruiting Chocolate Bash employees for one year after the transfer date. This measure is designed to protect Chocolate Bash's workforce and prevent franchisees from poaching employees who possess valuable knowledge of the Chocolate Bash system.
For a prospective Chocolate Bash franchisee, this clause highlights the importance of understanding all post-agreement obligations. Even after exiting the Chocolate Bash system through a transfer, the franchisee must still adhere to the employee recruitment restriction. Failure to comply could result in legal repercussions and damage the franchisee's reputation. Franchisees should factor this ongoing responsibility into their decision-making when considering a transfer.