Does the non-compete restriction for Golden Krust Caribbean Restaurant extend to the franchisee's spouse or child?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
sole and exclusive property and part of the System and deemed to be works made-for-hire for us. You and your owners agree to sign wherever assignment or other documents we request to evidence our ownership or to assist us in securing intellectual property rights in such ideas, concepts, techniques or materials.
A. EXCLUSIVE RELATIONSHIP
You acknowledge and agree that we would be unable to protect Confidential Information against unauthorized use or disclosure or to encourage a free exchange of ideas and information among Golden
Krust Restaurants if franchised owners of Golden Krust Restaurants were permitted to hold interest in or perform services for a Competitive Business (defined below). You also acknowledge that we have granted the Franchise to you in consideration of and reliance upon your agreement to deal exclusively with us. You therefore agree that, during the term of this Agreement, neither you nor any of your owners (nor any of your or your owners' spouses or children) will have a controlling interest in, or perform services for, a Competitive Business, wherever located.
The term "Competitive Business" as used in this Agreement means any business operating, or granting franchises or licenses to others to operate, any restaurant or food service business (other than a Golden Krust Restaurant operated under a franchise agreement with us).
VIII. SYSTEM STANDARDS
A. COMPLIANCE WITH SYSTEM STANDARDS
You acknowledge and agree that your operation and maintenance of the Restaurant in accordance with System Standards are essential to preserve the good will of the Marks and all Golden Krust Restaurants. Therefore, at all times during the term of this Agreement, you agree to operate and maintain the Restaurant in accordance with each and every System Standard, as we periodically modify and supplement them during the term of this Agreement. System Standards may regulate any one or more of the following with respect to the Restaurant:
- (1) design, sample drawings, décor, appearance and lighting; periodic maintenance, cleaning and sanitation; periodic remodeling; replacement of obsolete or worn-out leasehold improvements, fixtures, furnishings, equipment and signs; periodic painting; and use of interior and exterior signs, emblems, lettering and logos and the illumination thereof;
Source: Item 22 — CONTRACTS (FDD page 35)
What This Means (2024 FDD)
According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, the non-compete agreement extends to the franchisee's spouse and children during the term of the agreement. Specifically, neither the franchisee nor their owners (nor any of their or their owners' spouses or children) may have a controlling interest in, or perform services for, a Competitive Business. A Competitive Business is defined as any business operating a restaurant or food service business other than a Golden Krust Restaurant. This restriction applies wherever the Competitive Business is located.
Upon termination or expiration of the franchise agreement, a different non-compete provision applies. For a period of two years after termination, expiration, or sale of the restaurant, neither the franchisee nor their owners may have any direct or indirect interest in a Competitive Business. This includes interests held through a spouse or child. This restriction applies to businesses operating at the Premises, within ten miles of the Premises, or within five miles of any other Golden Krust Restaurant in operation or under construction.
Golden Krust Caribbean Restaurant includes these restrictions to protect its confidential information, maintain brand consistency, and encourage a free exchange of ideas among franchisees. The franchisee acknowledges that Golden Krust Caribbean Restaurant granted the franchise in consideration of and reliance upon the agreement to deal exclusively with them. These non-compete clauses are designed to prevent franchisees from using the franchisor's knowledge and system to benefit a competing business, ensuring the continued success and reputation of the Golden Krust Caribbean Restaurant brand.