What is the duration of the non-compete period after the termination or expiration of the Face Foundrie Area Developer 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, after the Area Developer Agreement is terminated or expires, the Area Developer is subject to a non-compete period of two years. This restriction applies from the date of a permitted transfer, the expiration of the agreement, the termination of the agreement (regardless of the cause), or a final order from an arbitrator or court regarding the same.
During this two-year period, the Area Developer cannot directly or indirectly own, maintain, operate, engage in, be employed by, or have any interest in any Competitive Business. This restriction applies to businesses located within the Development Area (excluding franchised facial bars provided for in the Development Schedule) or within a 10-mile radius of any other Face Foundrie Facial Bar in operation or under construction on the date of termination or expiration.
However, this non-compete provision does not prevent the Area Developer from operating a business under the Face Foundrie system under a franchise agreement with Face Foundrie. Additionally, the non-compete restrictions do not apply to ownership of less than 5% of the equity securities of any publicly held corporation.
This non-compete agreement ensures that former Area Developers do not use their knowledge of Face Foundrie's business practices to unfairly compete with the franchise system after their agreement ends. Prospective Area Developers should carefully consider these restrictions and how they might impact their future business endeavors.