VM VirtualBox - Run Webserver with encrytped Disk

I have a Web Server running on Ubuntu Server VM Virtual Box. The web server itself is actually an application to run some devices. Therefore, the VM will be a production 'application' that I will distribute to users.

The Idea:

• User will copy the VM to their machine
• Then they will boot up the VM using VirtualBox
• Then they will setup IP Configuration using 'user' only account of the VM (if needed).
• The way they use the application (the webserver - the vm), is that they will boot up the VM, and access the web from their own machine browser.

My question is: How to protect my webserver code inside the VM?

What I've done:

• Save the source code of the webserver in root only directory inside the VM [checked].
• Will not reveal the root password of the VM to the user [checked].

Is encrypting the disk will protect it? But it means then I need to tell user the decryption key in order for the user to use the VM (or more accurately, the webserver inside the VM), then meaning the encrypting disk is pointless?