Is involvement in a competitive business allowed during the term of the Face Foundrie franchise?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
13.04 and 13.06 | Franchise must be assigned by estate to an approved buyer. If your Salon Manager dies or becomes disabled, your Operating Partner must manage. | | q. | Non-competition covenants during the term of the franchise | Section 7.01(a) | No direct or indirect involvement in competitive business. Subject to state law. | | r. | Non-competition covenants after the | Section 7.01(b) | For two years, no involvement in competitive business located within a 10-mile radius of | | | Provision | Section in Franchise Agreement | Summary | |----|---------------------------------------------------|--------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | franchise is terminated or expires | | any Facial Bar. Competitive business includes any business operating or franchising an establishment (i) at which more than 10% of the offerings consist of facial services or beauty treatments for the face, or (ii) that offers waxing services.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION OF THE FRANCHISE RELATIONSHIP (FDD pages 51–59)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, franchisees are not allowed to be directly or indirectly involved in any competitive business during the term of the franchise agreement. Specifically, Section 7.01(a) of the Franchise Agreement states this restriction, although it is subject to state law. This means that while operating a Face Foundrie franchise, a franchisee cannot own, operate, or have a financial interest in any business that offers similar services or products.
This non-compete clause is a standard practice in franchising to protect the brand and the franchise system. It ensures that franchisees are fully committed to their Face Foundrie business and do not divert resources or knowledge to competing ventures. The restriction aims to maintain the integrity of the Face Foundrie brand and prevent franchisees from using the franchisor's confidential information or business model to benefit a competing business.
After the franchise agreement terminates or expires, a different set of restrictions applies. For two years following the end of the franchise term, a former franchisee cannot be involved in a competitive business within a 10-mile radius of any Face Foundrie location. A competitive business is defined as one that operates or franchises an establishment where more than 10% of the offerings consist of facial services or beauty treatments for the face, or that offers waxing services. This post-term non-compete is also subject to state law, meaning its enforceability can vary depending on the jurisdiction.
Prospective Face Foundrie franchisees should carefully review Section 7.01(a) and (b) of the Franchise Agreement, as well as relevant state laws, to fully understand the scope and enforceability of these non-compete provisions. Understanding these restrictions is crucial for planning future business activities and ensuring compliance with the franchise agreement.