What is the effect of the undersigned being a 'Restricted Party' in the Face Foundrie agreement?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.04 Personal Covenants of Restricted Parties. As a condition to the effectiveness of this Agreement, and at the time Franchisee delivers this signed Agreement to Franchisor, each Restricted Party must sign and deliver to Franchisor the Personal Covenants attached hereto as Exhibit E (the "Personal Covenants"), agreeing to be bound personally by all the provisions of Sections 7.01, 7.02, 7.03, 7.06 and 13.05 hereof. If there are any changes in the identity of any such Restricted Party while this Agreement is in effect, Franchisee must notify Franchisor promptly and cause the new Restricted Party to sign and deliver to Franchisor the Personal Covenants.
- 7.05 Agreements by Other Third Parties. As a condition to Franchisor's execution of this Agreement, Franchisee, if requested by Franchisor, shall cause its Operating Partner, each owner, officer and director (including their spouses), to execute a confidentiality, noncompetition, and/or nonsolicitation agreement in the form(s) approved or prescribed by Franchisor from time to time, which shall include specific identification of Franchisor as a third-party beneficiary of such covenants with the independent right to enforce them. In addition, Franchisee shall require its Salon Manager(s), managers, assistant managers, and any other personnel having access to any confidential information of Franchisor to execute covenants that they will maintain the confidentiality of information they receive in connection with their employment or engagement by Franchisee at the Facial Bar. Such covenants shall be in a form approved by Franchisor, including specific identification of Franchisor as a third-party beneficiary of such covenants with the independent right to enforce them, the current form of which is attached hereto as Exhibit I. You must deliver copies of such completed agreements within three (3) days of our request.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, if an individual is designated as a 'Restricted Party,' they are subject to specific covenants and obligations within the franchise agreement. As a condition of the Franchise Agreement's effectiveness, each Restricted Party must sign and deliver a Personal Covenants agreement to Face Foundrie, agreeing to be personally bound by the provisions outlined in Sections 7.01, 7.02, 7.03, 7.06 and 13.05 of the agreement. These sections likely pertain to confidentiality, non-competition, and non-solicitation clauses, ensuring that Restricted Parties do not disclose confidential information or engage in activities that could harm the Face Foundrie system.
Furthermore, if there are any changes in the identity of a Restricted Party during the term of the agreement, the franchisee is obligated to promptly notify Face Foundrie and ensure that the new Restricted Party signs and delivers the Personal Covenants agreement. This ensures that all individuals with access to sensitive information or influence over the franchise operations are bound by the same restrictions and obligations.
Face Foundrie also requires franchisees to ensure that their Operating Partner, owners, officers, directors (including spouses), Salon Managers, managers, assistant managers, and any other personnel with access to confidential information execute confidentiality, noncompetition, and/or nonsolicitation agreements. These agreements must identify Face Foundrie as a third-party beneficiary, granting Face Foundrie the independent right to enforce these covenants. Franchisees must provide copies of these completed agreements within three days of Face Foundrie's request, demonstrating the franchisor's commitment to protecting its confidential information and business interests through legally binding agreements with various parties associated with the franchise.