What does the Face Foundrie Area Developer warrant regarding other agreements or court orders?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
ié 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. Area Developer acknowledges and agrees that Area Developer shall be considered in default under this Agreement and that this Agreement will be subject to immediate termination as provided in Section 6.2 herein, in the event that a person in the immediate family (including spouse, domestic partner, parent or child) of Area Developer (or, if Area Developer is other than an individual, each Principal that is subject to these covenants) engages in a Competitive Business that would violate this Section 8.2.3 if such person was subject to the covenants of this Section 8.2.3.
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)
Based on the 2025 Face Foundrie Franchise Disclosure Document, the Area Developer's obligations regarding agreements and court orders pertain to non-compete clauses after the Area Development Agreement concludes. Specifically, the Area Developer is restricted from engaging in any competitive business for two years after the agreement's transfer, expiration, termination, or a final order from an arbitrator or court.
This restriction applies within the Development Area (excluding franchised locations) and within a 10-mile radius of any other Face Foundrie Facial Bar in operation or under construction. However, this non-compete clause does not prevent the Area Developer from operating a Face Foundrie business under a separate franchise agreement with the company.
An exception exists for ownership in public entities, where the Area Developer can hold less than a 5% beneficial interest in the equity securities of a publicly held corporation without violating the non-compete terms. This ensures that minor investments in public companies do not trigger a breach of contract.
In Minnesota, certain rights of the Area Developer are protected, ensuring that the agreement does not reduce any rights under Minnesota Statutes Chapter 80C, including rights to procedures, forums, or remedies provided by the jurisdiction's laws. Additionally, the Area Developer is not required to assent to a release, assignment, novation, or waiver that would relieve any person from liability imposed by Minnesota Statute §§80C.01 - 80C.22.