From what events does the two-year non-compete period begin for a Face Foundrie Area Developer?
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 subject to a two-year non-compete period that begins from the date of several events. These events include a transfer permitted under Section 7 of the Area Development Agreement, the expiration of the Area Development Agreement, or the termination of the Area Development Agreement, regardless of the cause for termination.
The non-compete period also begins following a final order from an arbitrator, panel of arbitrators, or a court of competent jurisdiction (after all appeals have been taken) regarding the aforementioned events or the enforcement of the non-compete clause itself. After any of these triggering events, the Area Developer is restricted from owning, maintaining, operating, engaging in, being employed by, or having any interest in any Competitive Business.
A Competitive Business is defined as one that is located within the Development Area (excluding franchised facial bars provided for in the Development Schedule) or within a 10-mile radius of the protected territory 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 the Franchisor. Furthermore, the restrictions do not apply to ownership of less than 5% of the equity securities of any publicly held corporation.