What are the restrictions on involvement in a competitive business after the Face Foundrie franchise is terminated or expires?

Question

Accepted Answer

| Provision |  | Section(s) in | Summary |
|---|---|---|---|
|  |  | Area Development Agreement | rights or obligations under the Area Development Agreement, or any material asset of your business, without our prior written consent, which shall be subject to all of the conditions and requirements for transfers set forth in the Franchise Agreement executed simultaneously with the Area Development Agreement that we deem applicable to a proposed transfer under the Area Development Agreement. |
| (l) Franchisor approval | Section 7.2 |  | We have the right to approve transfers. |
| of transfer by area |  |  |  |
| developer |  |  |  |
| (m) Conditions for franchisor’s approval of transfer | Sections 7.2 and 7.3 |  | Unless waived, a transfer of the Area Development Agreement is conditioned on, among other factors, the requirement that the proposed transfer of the Area Development Agreement be made in conjunction with a simultaneous transfer of all existing Franchise Agreements to the same approved transferee. Additionally, your first Facial Bar under your first Franchise Agreement must be open and operating. |
| (n) Franchisor’s right of | Not Applicable |  |  |
| first refusal to acquire |  |  |  |
| area developer’s |  |  |  |
| business |  |  |  |
| (o) Franchisor’s option to | Not Applicable |  |  |
| purchase area |  |  |  |
| developer’s business |  |  |  |
| (p) Death or disability of area developer | Section 5.2 |  | In the event your Operating Partner dies or becomes incapacitated, you must designate a new Operating Partner that owns at least a 20% ownership interest in you, subject to our approval. |
| (q) Non-competition covenants during the term of the franchise | Section 8.2 |  | No direct or indirect involvement in competitive business. |
| (r) Non-competition covenants after the franchise is terminated or expires | Section 8.3 |  | For two years, no involvement in competitive business located within a 10-mile radius of any Facial Bar. |
| Provision |  | Section(s) in Area Development Agreement | Summary |
| (s) Modification of the agreement | Section 15 |  | Except for those permitted to be made unilaterally by us hereunder, no amendment, change, or variance from the Area Development Agreement will be binding on either party unless mutually agreed to by the parties and executed by their authorized officers or agents in writing. |
| (t) Integration/merger clause | Section 15 |  | Only the terms of the Area Development Agreement and other related written agreements are binding (subject to applicable state law). Any representations or promises outside of the Disclosure Document and Area Development Agreement may not be enforceable. No claim made in any franchise agreement is intended to disclaim the representations made in this Franchise Disclosure Document. |
| (u) Dispute resolution by | Sections 16.3 and 16.4 |  | Except for certain claims, all disputes must be |
| arbitration or |  |  | mediated, and if not settled by mediation, are then |
| mediation |  |  | subject to arbitration. |
| (v) Choice of forum | Section 16.5 |  | Litigation must be held in the federal or state court for the district where our principal executive office is located (subject to state law). Mediation must occur in a metropolitan area within 20 miles of our principal executive office and arbitration must occur in the office of the American Arbitration Association closest to our principal executive office. |
| (w) Choice of law | Section 16.1 |  | Minnesota law applies generally, provided that the Minnesota Franchise Act and other franchise- specific laws and regulations of the State of Minnesota generally do not apply to Facial Bars located outside of Minnesota. (Subject to applicable state law.) |
|  | Provision | Section in Franchise Agreement | Summary the Facial Bar; and offer us the right to purchase the Facial Bar and/or assume interest in lease or sublease. |
| j. | Assignment of contract by franchisor | Section 13.07 | No restriction on our right to assign. |
| k. | "Transfer" by franchisee – defined | Section 1.04 | Includes transfer of Franchise Agreement, any interest in Franchise Agreement, any assets of Facial Bar, the Facial Bar premises, or any equity interest in you if you are an entity or any equity interest in any owners of you if they are an entity. |
| l. | Franchisor approval of | Section | We have the right to approve all transfers but |
|  | transfer by franchisee | 13.01 | will not unreasonably withhold approval. |
| m. | Conditions for franchisor approval of transfer | Section 13.02 | Transferee qualifies; transferee assuming obligations under Franchise Agreement and/or entering into new franchise agreement and any other agreements we require; terms and conditions of transfer are satisfactory to us; you are not in default under the Franchise Agreement, or any other agreement between you and us; transferee completes training; upgrade Facial Bar if required; signing of a general release; fee paid; and we decline to exercise our right of first refusal. |
| n. | Franchisor's right of first refusal to acquire franchisee's business | Section 13.05 | We can match any offer for the transfer of your business or any ownership interest. |
| o. | Franchisor's option to purchase franchisee's business | Section 16.03 | Upon expiration or termination of the Franchise Agreement, you must offer us the right to purchase the Facial Bar. |
| p. | Death or disability of franchisee | Sections 8.03, 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

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION OF THE FRANCHISE RELATIONSHIP (FDD pages 51–59)

What are the restrictions on involvement in a competitive business after the Face Foundrie franchise is terminated or expires?

Answer from 2025 FDD Document

What This Means (2025 FDD)

Provision		Section(s) in	Summary
		Area Development Agreement	rights or obligations under the Area Development Agreement, or any material asset of your business, without our prior written consent, which shall be subject to all of the conditions and requirements for transfers set forth in the Franchise Agreement executed simultaneously with the Area Development Agreement that we deem applicable to a proposed transfer under the Area Development Agreement.
(l) Franchisor approval	Section 7.2		We have the right to approve transfers.
of transfer by area
developer
(m) Conditions for franchisor’s approval of transfer	Sections 7.2 and 7.3		Unless waived, a transfer of the Area Development Agreement is conditioned on, among other factors, the requirement that the proposed transfer of the Area Development Agreement be made in conjunction with a simultaneous transfer of all existing Franchise Agreements to the same approved transferee. Additionally, your first Facial Bar under your first Franchise Agreement must be open and operating.
(n) Franchisor’s right of	Not Applicable
first refusal to acquire
area developer’s
business
(o) Franchisor’s option to	Not Applicable
purchase area
developer’s business
(p) Death or disability of area developer	Section 5.2		In the event your Operating Partner dies or becomes incapacitated, you must designate a new Operating Partner that owns at least a 20% ownership interest in you, subject to our approval.
(q) Non-competition covenants during the term of the franchise	Section 8.2		No direct or indirect involvement in competitive business.
(r) Non-competition covenants after the franchise is terminated or expires	Section 8.3		For two years, no involvement in competitive business located within a 10-mile radius of any Facial Bar.
Provision		Section(s) in Area Development Agreement	Summary
(s) Modification of the agreement	Section 15		Except for those permitted to be made unilaterally by us hereunder, no amendment, change, or variance from the Area Development Agreement will be binding on either party unless mutually agreed to by the parties and executed by their authorized officers or agents in writing.
(t) Integration/merger clause	Section 15		Only the terms of the Area Development Agreement and other related written agreements are binding (subject to applicable state law). Any representations or promises outside of the Disclosure Document and Area Development Agreement may not be enforceable. No claim made in any franchise agreement is intended to disclaim the representations made in this Franchise Disclosure Document.
(u) Dispute resolution by	Sections 16.3 and 16.4		Except for certain claims, all disputes must be
arbitration or			mediated, and if not settled by mediation, are then
mediation			subject to arbitration.
(v) Choice of forum	Section 16.5		Litigation must be held in the federal or state court for the district where our principal executive office is located (subject to state law). Mediation must occur in a metropolitan area within 20 miles of our principal executive office and arbitration must occur in the office of the American Arbitration Association closest to our principal executive office.
(w) Choice of law	Section 16.1		Minnesota law applies generally, provided that the Minnesota Franchise Act and other franchise- specific laws and regulations of the State of Minnesota generally do not apply to Facial Bars located outside of Minnesota. (Subject to applicable state law.)
	Provision	Section in Franchise Agreement	Summary the Facial Bar; and offer us the right to purchase the Facial Bar and/or assume interest in lease or sublease.
j.	Assignment of contract by franchisor	Section 13.07	No restriction on our right to assign.
k.	"Transfer" by franchisee – defined	Section 1.04	Includes transfer of Franchise Agreement, any interest in Franchise Agreement, any assets of Facial Bar, the Facial Bar premises, or any equity interest in you if you are an entity or any equity interest in any owners of you if they are an entity.
l.	Franchisor approval of	Section	We have the right to approve all transfers but
	transfer by franchisee	13.01	will not unreasonably withhold approval.
m.	Conditions for franchisor approval of transfer	Section 13.02	Transferee qualifies; transferee assuming obligations under Franchise Agreement and/or entering into new franchise agreement and any other agreements we require; terms and conditions of transfer are satisfactory to us; you are not in default under the Franchise Agreement, or any other agreement between you and us; transferee completes training; upgrade Facial Bar if required; signing of a general release; fee paid; and we decline to exercise our right of first refusal.
n.	Franchisor's right of first refusal to acquire franchisee's business	Section 13.05	We can match any offer for the transfer of your business or any ownership interest.
o.	Franchisor's option to purchase franchisee's business	Section 16.03	Upon expiration or termination of the Franchise Agreement, you must offer us the right to purchase the Facial Bar.
p.	Death or disability of franchisee	Sections 8.03, 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