What obligations do I have under the Guaranty included in the Endless Summer Sweets Franchise Agreement?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
In this disclosure document, "we," "us," or "our" refers to Endless Summer Sweets Franchising, Inc. "You" means the person to whom we grant a franchise. If you are a corporation, limited liability company, or other entity, each owner of the franchise entity must sign our Guaranty and Non-Compete Agreement, which means that all of the franchise agreement's provisions also will apply to your owners.
This Guaranty and Non-Compete Agreement (this "Guaranty") is executed by the undersigned person(s) (each, a "Guarantor") in favor of Endless Summer Sweets Franchising, Inc. , a California Limited Liability Company ("Franchisor" ).
make every effort to maintain the confidentiality of all such information during and after the term of the Franchise Agreement, (e) not copy or otherwise reproduce any Confidential Information, and (f) promptly report any unauthorized disclosure or use of Confidential Information. Guarantor acknowledges that all Confidential Information is owned by Franchisor or its affiliates (except for Confidential Information which Franchisor licenses from another person or entity). Guarantor acknowledges that all customer data generated or obtained by Guarantor is Confidential Information belonging to Franchisor. This Section will survive the termination or expiration of the Franchise Agreement indefinitely.
3. Covenants Not to Compete.
- (a) Restriction In Term.
During the term of the Franchise Agreement, Guarantor shall not 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 the Franchise Agreement expires or is terminated for any reason (or, if applicable, for two years after a Transfer by Guarantor), Guarantor shall not 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 located within twentyfive (25) miles of Franchisee's Territory or the territory of any other Endless Summer Sweets 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 be the Development Area and the territory of any other Endless Summer Sweets business operating on the date of termination.
- (c) Interpretation.
Guarantor agrees that each of the foregoing covenants is independent of any other covenant or provision of this Guaranty or the Franchise Agreement.
If all or any portion of the covenants in this Section is held to be unenforceable or unreasonable by any court or arbitrator, then the parties intend that the court or arbitrator modify such restriction to the extent reasonably necessary to protect the legitimate business interests of Franchisor.
"Territory" means the territory stated on the Location Acceptance Letter.
"Transfer" means for Franchisee (or any Owner) to voluntarily or involuntarily transfer, sell, or dispose of, in any single or series of transactions, (i) substantially all of the assets of the Business, (ii) this Agreement, (iii) any direct or indirect ownership interest in the Business, or (iv) control of the Business.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to the 2024 Endless Summer Sweets FDD, if you are a corporation, limited liability company, or other entity, each owner of the franchise entity must sign Endless Summer Sweets' Guaranty and Non-Compete Agreement. This means that all provisions of the franchise agreement will also apply to your owners. The Guaranty and Non-Compete Agreement requires the guarantor to maintain the confidentiality of all confidential information during and after the term of the Franchise Agreement, not copy or reproduce any confidential information, and promptly report any unauthorized disclosure or use of confidential information. The guarantor acknowledges that all customer data generated or obtained is confidential information belonging to Endless Summer Sweets.
During the term of the Franchise Agreement, 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. For two years after the Franchise Agreement expires or is terminated, 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 25 miles of the franchisee's territory or the territory of any other Endless Summer Sweets business operating on the date of termination or transfer.
The territory is the territory stated on the Location Acceptance Letter. A transfer means for the franchisee (or any owner) to voluntarily or involuntarily transfer, sell, or dispose of, in any single or series of transactions, substantially all of the assets of the business, the agreement, any direct or indirect ownership interest in the business, or control of the business. These covenants are independent of any other covenant or provision of the Guaranty or the Franchise Agreement. If any portion of these covenants is held to be unenforceable, the parties intend for the court or arbitrator to modify the restriction to protect the legitimate business interests of Endless Summer Sweets.