Is the Face Foundrie Area Developer allowed to provide assistance to a Competitive Business after the agreement?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
- 8.3 After the Agreement and After a Transfer*.* Area Developer covenants that, except as otherwise approved in writing by Franchisor, for a continuous uninterrupted period of two (2) years from the date of (a) a transfer permitted under Section 7 above; (b) expiration of this Agreement; (c) termination of this Agreement (regardless of the cause for termination); (d) a final order of a duly authorized arbitrator, panel of arbitrators, or a court of competent jurisdiction (after all appeals have been taken) with respect to any of the foregoing or with respect to enforcement of this Section 8.3; or (e) any or all of the foregoing, Area Developer shall not either directly or indirectly, for itself, or through, on behalf of, or in conjunction with any person, partnership, corporation, or other entity, own, maintain, operate, engage in, be employed by, or have any interest in any Competitive Business, which is, or is intended to be, located (i) within the Development Area (other than those Franchised Facial Bars provided for in the Development Schedule), or (ii) within a radius of ten (10) miles of the protected territory of any other Face Foundrié Facial Bar in operation or under construction on the effective date of termination or expiration.
Provided, however, that this provision shall not apply to the operation by Area Developer of any business under the System under a franchise agreement with Franchisor.
- 8.4 Exception for Ownership in Public Entities.
Sections 8.2 and 8.3 hereof shall not apply to ownership by Area Developer of less than a five percent (5%) beneficial interest in the outstanding equity securities of any publicly held corporation.
Source: Item 23 — RECEIPTS (FDD pages 74–257)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, an Area Developer is restricted from involvement with a Competitive Business for a period after the agreement concludes. Specifically, for two years following a transfer, expiration, or termination of the Area Development Agreement, the Area Developer cannot own, maintain, operate, engage in, be employed by, or have any interest in a Competitive Business.
A Competitive Business is defined as one that operates or franchises an establishment where more than 10% of its offerings are facial services or beauty treatments for the face, or that offers waxing services. This restriction applies within the Development Area (excluding franchised Face Foundrie Facial Bars) or within a 10-mile radius of any other Face Foundrie Facial Bar in operation or under construction at the time of termination or expiration.
However, there are exceptions to this restriction. The Area Developer can operate a business under the Face Foundrie System through a franchise agreement with Face Foundrie. Additionally, the restriction does not apply if the Area Developer owns less than 5% of the equity securities of a publicly held corporation. These post-term restrictions are designed to protect Face Foundrie's market and brand integrity by preventing former Area Developers from directly competing using the knowledge and experience gained during their agreement.