What activities are the 1 800 Packouts franchisee and their Owners prohibited from engaging in?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
You acknowledge that you will receive valuable, specialized training and confidential information regarding the operational, sales, promotional, and marketing methods of the 1-800-PACKOUTS concept. During the Term, you and your Owners will not, without our prior written consent, either directly or indirectly, for themselves, or through, on behalf of, or in conjunction with any other person or Entity (e.g., through an affiliate, spouse, child, or other relative):
- (1) own, manage, engage in, be employed by, advise, make loans to, or have any other interest in (a) any other business offering or providing services or products competitive with or similar to the services or products offered or provided by Franchised Businesses or (b) any business which franchises or licenses others to offer or provide such services or products (collectively, each, a "Competitive Business") at any location anywhere;
- (2) divert or attempt to divert any business or customer or potential business or customer of the Franchised Business to any Competitive Business, by direct or indirect inducement or otherwise;
- (3) perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System;
- (4) use any vendor relationship established through your association with us for any purpose other than to purchase products or equipment for use or retail sale in the Franchised Business; or
- (5) directly or indirectly solicit for employment any person who at any time within the immediate past 12 months has been employed by us, or our affiliates, or by any of our franchisees.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISED BUSINESS (FDD page 47)
What This Means (2025 FDD)
According to the 2025 FDD, during the term of the franchise agreement, 1 800 Packouts franchisees and their Owners are subject to certain covenants not to compete. These covenants restrict their involvement in activities that could be detrimental to the 1 800 Packouts system. These restrictions apply without the prior written consent of 1 800 Packouts.
Specifically, franchisees and their Owners are prohibited from owning, managing, engaging in, being employed by, advising, making loans to, or having any interest in any business that competes with 1 800 Packouts. This includes businesses offering similar services or products, as well as businesses that franchise or license others to do so. They are also barred from diverting or attempting to divert any business or customers of the franchised business to any competitive business.
Additionally, franchisees and their Owners must not perform any act that is injurious or prejudicial to the goodwill associated with the 1 800 Packouts marks and system. They are restricted from using vendor relationships established through their association with 1 800 Packouts for purposes other than purchasing products or equipment for the franchised business. Lastly, they cannot directly or indirectly solicit for employment any person who has been employed by 1 800 Packouts, its affiliates, or any of its franchisees within the past 12 months.