factual

What restrictive covenants are detailed in Section 7 of the Face Foundrie Franchise Agreement for Face Foundrie?

Face_Foundrie Franchise · 2025 FDD

Answer from 2025 FDD Document

nchisee's past due amounts. Franchisee acknowledges that Franchisor has the right to set-off amounts Franchisee owes Franchisor against any amounts Franchisor may owe Franchisee. Franchisee agrees not to set off or withhold payment of any monthly or other amounts due to Franchisor or its Affiliates, due to the nonperformance or alleged nonperformance by Franchisor of any of its obligations hereunder.

7. RESTRICTIVE COVENANTS.

7.01 Covenants Not to Compete.

  • (a) Non-Competition during Term. In addition to and not in limitation of any other restrictions on Franchisee contained herein, Franchisee and Franchisee's spouse, and, if Franchisee is not an individual, each of its Owners and their spouses (each, a "Restricted Party"), agree that they will not, directly or indirectly, for and on behalf of itself, himself, herself or any other Person, without the prior written consent of Franchisor, during the Term (i) have any direct or indirect interest as a disclosed or beneficial owner in a Competitive Business, regardless of location or (ii) perform services as a director, officer, manager, employee, consultant, representative, agent, or otherwise for a Competitive Business, regardless of location.
  • (b) Post-Term Non-Competition. In addition to and not in limitation of any other restrictions on Franchisee contained herein, Franchisee and the Restricted Parties agree that they will not, for two (2) years following the effective date of termination or expiration of this Agreement for any reason, or following the date of a Transfer by Franchisee, or, with respect to a Restricted Party only, by such Restricted Party, directly or indirectly, for and on behalf of itself, himself, herself or any other Person, without the prior written consent of Franchisor, (i) have any direct or indirect interest as a disclosed or beneficial owner in a Competitive Business or (ii) perform services as a director, officer, manager, employee, consultant, representative, agent, or otherwise for a Competitive Business which, in either case, is located or operating within a ten (10) mile radius of the protected territory of any Face Foundrié Facial Bar in operation or under construction on the effective date of termination or expiration.
  • (c) General. The parties acknowledge that the covenants contained in this Section 7.01 are given in consideration of the fact that Franchisee and the Restricted Parties will possess knowledge of

Franchisor's business and operating methods and Confidential Information, disclosure and use of which would prejudice the interest of Franchisor and its franchisees and licensees of other Face Foundrié Facial Bars. Franchisee further understands and acknowledges the difficulty of ascertaining monetary damages and the irreparable harm that would result from breach of these covenants. If any part of this restriction is found to be unreasonable in scope, time or distance, such scope, time or distance may be reduced by appropriate order of the court to that deemed reasonable. Franchisor shall, as a matter of course, receive injunctive relief to enforce such covenants in addition to any other relief to which it may be entitled at law or in equity. Franchisor shall receive such injunctive relief without the necessity of posting bond or other security, such bond or other security being hereby waived.

7.02 Confidential Information.

  • (a) Franchisee acknowledges and agrees that in connection with the ownership, development and/or operation of Face Foundrié Facial Bars by Franchisor and its Affiliates, Franchisor and its Affiliates have developed at great expense Confidential Information that is part of the System and that is not commonly known by or available to the public. This Confidential Information does not include any information that (i) is commonly known by or available to the public; (ii) has been voluntarily disclosed to the public by Franchisor or its Affiliates; (iii) has been independently developed or lawfully obtained by Franchisee (other than by virtue of disclosure by Franchisor or its Affiliates in connection with this Agreement); or (iv) has otherwise entered the public domain through lawful means.
  • (b) Franchisee and each Restricted Party agree that while this Agreement remains in effect such party will not, directly or indirectly, disclose or publish to any Person, or copy or use for such party's own benefit, or for the benefit of any other Person, any Confidential Information, except as required to carry out Franchisee's obligations under this Agreement or as Franchisor has otherwise expressly approved in writing. As between Franchisor, on the one hand, and Franchisee and the Restricted Parties, on the other hand, all Confidential Information is the sole and exclusive property of Franchisor. Franchisee and each Restricted Party agree that the restrictions contained in the preceding sentences in this Section 7.02(b) will remain in effect with respect to Confidential Information for five (5) years following termination or expiration of this Agreement for any reason; provided, however, if the Confidential Information rises to the level of a trade secret under applicable law, then such restriction shall remain in effect until such time as the information does not constitute a trade secret. Franchisee also agrees that it and all of its Personnel will take appropriate steps to protect Confidential Information from any unauthorized disclosure, copying or use. At any time upon Franchisor's request, and in any event upon expiration or termination of this Agreement, Franchisee will immediately return any copies of documents where there are materials containing Confidential Information and will take appropriate steps to permanently delete and render unusable any Confidential Information stored electronically.
  • 7.03 Data and Customers. In addition to the obligations set forth in Sections 7.01 and 7.02 above, Franchisee: (a) shall not reproduce, release or in any way make available or furnish, either directly or indirectly, to any person or Entity at any time, any information concerning the customers of Franchisee under this Agreement, which may be used to solicit sales from such customers including, but not limited to, the type of sales covered by this Agreement; (b) shall protect all said customer information from disclosure, destruction, loss or theft during the Term of this Agreement and until all copies of customer lists and copies of all other information concerning customers are turned over to Franchisor; (c) agrees not to use or permit to be used said information concerning Franchisee's customers in any manner except in the performance of this Agreement; and (d) shall at all times maintain any information, including lists, relating to the customers of Franchisee separate and distinct from any customer information Franchisee may maintain that is unrelated to this Agreement. In addition to the obligations set forth above, upon termination of this Agreement for any reason, Franchisee shall immediately deliver to Franchisor all copies of lists of customers and copies of all other information concerning customers, including, but not limited to, all computer generated data regarding such customers, and neither Franchisee nor its directors, officers, Owners, managers, employees, successors and assigns shall use any said information concerning such customers to solicit any of such customers.

Source: Item 22 — CONTRACTS (FDD pages 73–74)

What This Means (2025 FDD)

According to the 2025 Face Foundrie Franchise Disclosure Document, Section 7 outlines the restrictive covenants that franchisees and related parties must adhere to, focusing on non-competition and confidentiality. During the term of the agreement, franchisees and their spouses (or owners and their spouses if the franchisee is not an individual), defined as "Restricted Parties," are prohibited from having any direct or indirect interest in a Competitive Business or performing services for one, regardless of location, without Face Foundrie's prior written consent.

Post-termination, for a period of two years after the agreement ends (or after a transfer by the franchisee or a Restricted Party), these parties are restricted from involvement with a Competitive Business within a ten-mile radius of any operating or under-construction Face Foundrie Facial Bar. These covenants are acknowledged as reasonable and necessary to protect the Face Foundrie system, other Face Foundrie Facial Bars, and the legitimate interests of Face Foundrie.

Additionally, franchisees must maintain the confidentiality of information related to Face Foundrie. This includes not disclosing or using any Confidential Information, which encompasses proprietary knowledge and trade secrets, for their own benefit or the benefit of others, unless required to fulfill obligations under the Franchise Agreement or with Face Foundrie's written approval. These restrictions aim to safeguard Face Foundrie's competitive edge and proprietary information, ensuring the continued success and uniformity of the brand.

These covenants also extend to other third parties associated with the franchisee. If requested by Face Foundrie, the franchisee must ensure that their Operating Partner, owners, officers, directors (including their spouses), execute confidentiality, noncompetition, and/or nonsolicitation agreements. Salon Managers, managers, assistant managers, and any personnel with access to confidential information must also agree to maintain confidentiality. These agreements must identify Face Foundrie as a third-party beneficiary with the right to enforce these covenants, with copies provided to Face Foundrie within three days of request.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.