Does the Endless Summer Sweets Franchise Agreement include a Guaranty and Non-Compete Agreement?

According to the 2024 Endless Summer Sweets Franchise Disclosure Document, the franchise agreement does include a Guaranty and Non-Compete Agreement. This agreement is executed by the guarantor in favor of Endless Summer Sweets Franchising, Inc. The guarantor is typically an owner or principal in the franchisee entity who is guaranteeing the franchisee's obligations under the Franchise Agreement.

The Guaranty and Non-Compete Agreement includes covenants not to compete, restricting the guarantor from involvement with any competitor during the term of the Franchise Agreement. After the agreement expires or is terminated, the guarantor is restricted for two years from having any involvement with a competitor within twenty-five miles of the franchisee's territory or any other Endless Summer Sweets business. These restrictions apply to ownership, lending money, providing services, or being employed by a competitor.

The Franchise Agreement also addresses non-compete obligations for the franchisee, owners, and their spouses, preventing them from engaging with any competitor during the term of the agreement. Post-term, these parties are restricted for two years from involvement with a competitor located at the Endless Summer Sweets premises or within a twenty-five-mile radius of any Endless Summer Sweets location. The agreement specifies that the non-compete period does not accrue during any violation of this covenant. Prospective franchisees should carefully review these non-compete provisions with legal counsel, as the FDD notes that these provisions may not be enforceable under California law.