For Face Foundrie, which provisions or covenants in the agreement survive its expiration or termination?
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. As used in this Agreement, the term "publicly held corporation" refers to a corporation which has outstanding securities that have been registered under the federal Securities Exchange Act of 1934.
8.5 Covenants as Independent Clauses*.* The parties agree that each of the foregoing covenants shall be construed as independent of any other covenant or provision of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 74–257)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, several provisions and covenants within the Area Development Agreement survive its expiration or termination. Specifically, any provision or covenant that expressly or by its nature imposes obligations beyond the term of the agreement will remain in effect. This includes obligations and liabilities arising from events occurring before the termination date, as detailed in the Guaranty agreement.
One significant covenant that survives termination relates to non-competition. For a period of two years following the transfer, expiration, or termination of the agreement, the Area Developer is restricted from engaging in any Competitive Business within the Development Area or within a 10-mile radius of any other Face Foundrie Facial Bar. This restriction applies whether the Area Developer acts directly or indirectly, and includes owning, operating, or being employed by a Competitive Business.
Furthermore, the Area Developer remains responsible for paying all sums owed to Face Foundrie and its affiliates upon termination or expiration. If the termination results from the Area Developer's default, these sums include all damages, costs, and expenses, including reasonable attorneys' fees, incurred by Face Foundrie. This obligation is secured by a lien in favor of Face Foundrie against the Area Developer's personal property, furnishings, equipment, signs, fixtures, and inventory. These measures protect Face Foundrie's interests and ensure continued compliance with key terms even after the agreement concludes.