Does the Desi District Guaranty specify any time limits on the Guarantor's obligations?

According to Desi District's 2024 Franchise Disclosure Document, the Guaranty includes a time limitation regarding the covenant not to compete. Specifically, 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), the Guarantor cannot have any ownership interest in, lend money or provide financial assistance to, provide any services to, or be employed by, any Competitor located within five miles of Franchisee's Territory or the territory of any other Desi District business operating on the date of termination or transfer, as applicable. If the Franchise Agreement is terminated before the Territory is determined, then the area of non-competition will the Development Area and the territory of any other Desi District business operating on the date of termination.

This means that after the franchise agreement ends, the guarantor is restricted from engaging in competitive activities within a specific geographic area for a period of two years. This restriction applies regardless of whether the agreement expires naturally or is terminated early. The geographic scope is tied to the franchisee's territory or, if undetermined, the development area and the territories of other Desi District businesses.

This non-compete clause is designed to protect Desi District's market share and confidential information. The guarantor, by virtue of their association with the franchisee, would have gained knowledge and insights into the Desi District business model. Preventing them from immediately applying this knowledge to a competing business safeguards Desi District's competitive advantage. The guarantor should carefully consider the implications of this restriction before signing the Guaranty, as it could limit their future business opportunities.