After the Face Foundrie agreement terminates, for how long is the franchisee restricted from having a direct interest in a Competitive Business?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
1.04 Certain Definitions. The terms listed below have the meanings which follow them and include the plural as well as the singular.
Other terms are defined elsewhere in this Agreement in the context in which they arise.
- (a) "Affiliate" Any Person that directly or indirectly owns or controls the referenced party, that is directly or indirectly owned or controlled by the referenced party, or that is under common control with the referenced party.
The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an Entity, whether through ownership of voting securities, by contract or otherwise.
- (b) "Competitive Business" Any business operating or franchising an establishment (i) at which more than 10% of the offerings consists of facial services or beauty treatments for the face, or (ii) that offers waxing services.
Restrictions in this Agreement on competitive activities do not apply to: (i) the ownership or operation of other Face Foundrié Facial Bars that are licensed or franchised by Franchisor or any of its Affiliates; or (b) the ownership of shares of a class of securities that are listed on a public stock exchange or traded on the over-the-counter market and that represent less than five percent (5%) of that class of securities.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2025 FDD)
The 2025 Face Foundrie Franchise Disclosure Document does not explicitly state a time period during which a franchisee is restricted from having a direct interest in a Competitive Business after the franchise agreement terminates. However, the document does define what constitutes a Competitive Business as any business operating or franchising an establishment where more than 10% of its offerings consist of facial services or beauty treatments for the face, or that offers waxing services.
Item 22 of the FDD outlines various obligations upon termination or expiration of the agreement, such as discontinuing the use of Face Foundrie's marks and confidential information. It also states that the franchisee must not operate under any name that gives the impression that the agreement is still in effect or that they are connected with Face Foundrie.
While a specific non-compete duration isn't mentioned, the FDD emphasizes the protection of Face Foundrie's confidential information and brand reputation. A prospective franchisee should seek clarification from Face Foundrie regarding any post-termination restrictions on competitive activities to fully understand their obligations.