What is the Ella Cafe guarantor prohibited from doing that would be considered diverting customers?

According to Ella Cafe's 2024 Franchise Disclosure Document, as a condition of the personal guaranty, the guarantor is restricted from actions that could harm the franchise. Specifically, while the guarantor is an Owner of the Developer, and for two years after they cease to be an Owner or two years after the termination or expiration of the Development Agreement (whichever comes first), they are prohibited from diverting or attempting to divert any present or prospective customer of an Ella Cafe to a competitor.

This restriction includes any direct or indirect inducement that could lead customers to choose a competitor over Ella Cafe. Additionally, the guarantor cannot perform any action that could be injurious or prejudicial to the goodwill associated with the Ella Cafe brand, Marks, and System. This is a standard clause in franchise agreements to protect the brand and customer base.

This clause ensures that individuals with a vested interest in the Ella Cafe franchise, who have access to confidential information and have benefited from the brand's reputation, cannot leverage their knowledge or position to benefit a competing business. The two-year restriction period after leaving the business is designed to prevent unfair competition using the knowledge and experience gained while associated with Ella Cafe. Prospective franchisees should carefully consider these restrictions and how they might impact their future business ventures.