Who are considered 'Restricted Parties' under the Chocolate Fish Coffee agreement?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
- (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, lend money or provide financial assistance to, provide any services to, or be 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, lend money or provide financial assistance to, provide any services to, or be employed by, any Competitor within five miles of Franchisee's Territory or the territory of any other Chocolate Fish Coffee business operating on the date of termination or transfer, as applicable. If this Agreement is terminated before the Territory is determined, then the area of non-competition will the Development Area and the territory of any other Chocolate Fish Coffee business operating on the date of termination.
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, the term 'Restricted Parties' pertains to specific individuals who are subject to non-compete restrictions outlined in the franchise agreement. During the term of the agreement, these restrictions prevent them from engaging in activities that could be seen as competitive to Chocolate Fish Coffee.
Specifically, 'Restricted Parties' include the franchisee, any owner of the franchise, and the spouse of any owner. This means that all these individuals are barred from having any ownership interest in, lending money or providing financial assistance to, providing services to, or being employed by any competitor of Chocolate Fish Coffee during the term of the franchise agreement.
After the franchise agreement expires or is terminated, these restrictions continue for a period of two years. During this post-term period, the 'Restricted Parties' are prohibited from engaging in competitive activities within a five-mile radius of the franchisee's territory or the territory of any other Chocolate Fish Coffee business operating at the time of termination or transfer. This non-compete clause is designed to protect Chocolate Fish Coffee's market and business interests by preventing those with knowledge of the franchise's operations from directly competing with it.